GBP

HMRC launches online time-to-pay arrangements for VAT

30 June 2023| CATEGORIES: HMRC online services, time-to-pay, VAT debt| TAGS:

From 31 May 2023, VAT-registered businesses that owe less than £20,000 of VAT can set up a payment plan online. Payment plans are sometimes known as time-to-pay agreements.

A VAT-registered business can set up its VAT payment plan online via its business tax account if it:

  • has filed its latest VAT return;
  • owes £20,000 or less;
  • is within 28 days of the payment deadline;
  • does not have any other payment plans or debts with HMRC; and
  • plans to pay off its debt within the next 6 months.

Certain businesses are not eligible to set up a VAT payment plan online. This includes businesses that use the VAT cash accounting or annual accounting schemes, and businesses that make VAT payments on account.

This facility will be helpful for some VAT registered businesses that do not have the funds to settle an outstanding VAT liability in one payment. It will be interesting to see whether HMRC extend this option to businesses with larger VAT debts in the future.

Businesses not eligible to use the self-serve time-to-pay service should contact HMRC if they need to agree a payment plan.

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