HM Revenue & Customs (HMRC) has recently announced a new digital service, offering you the opportunity to establish online payment plans for any VAT that you owe.
If your business owes £20,000 or less in VAT, you can now take advantage of this new online arrangement.
This provision, launched on 31 May 2023, forms part of a broader initiative by HMRC to digitalise tax reporting and payments.
Who is eligible?
To qualify for this online payment plan, your business must:
Please note that businesses enrolled in the Cash Accounting Scheme, Annual Accounting Scheme, or those making payments on account are ineligible to establish an online payment plan. These businesses will need to contact HMRC via traditional means.
How can you set up a plan?
To set up an online payment plan, you will need:
While this recent update from HMRC primarily pertains to VAT payments, online payment plans can also be utilised for Self-Assessment tax returns and employers’ PAYE contributions, although the eligibility criteria will differ.
Can you set up a plan for Self-Assessment repayments?
A Self-Assessment payment plan can be established online if the latest tax return has been filed, your business owes £30,000 or less, it is within 60 days of the payment deadline, and you have no other payment plans or debts with HMRC.
Plan for employers’ PAYE contributions repayments
For employers’ PAYE contributions, an online payment plan can be initiated if your business owes £15,000 or less, is within 35 days of the payment deadline, and commits to paying off the debt within six months.
Additionally, you must have submitted any due employers’ PAYE submissions and Construction Industry Scheme (CIS) returns, and you should not have any other debts or payment plans with HMRC or any outstanding penalties.
Need advice on your business’s VAT obligations? Get in touch.
