VAT registered businesses that owe less than £20,000 of VAT are now able to set up a ‘Time to Pay’ agreement.
A Time to Pay arrangement just means setting up a plan to pay VAT in instalments.
Payment plans are subject to HMRC’s prevailing interest rate, which is the base rate + 2.5%.
The VAT payment plan can be set up online, through the Government Gateway login.
Criteria for setting up a VAT payment plan online
To set up a time to pay agreement, a business must have
- Filed its latest VAT return;
- Owe £20,000 or less;
- Be within 28 days of the payment deadline;
- Have no other payment plans or debts with HMRC; and
- Plan to pay off its debts within the next six months.
Businesses that are not eligible to set up a time to pay agreement are those that
- Use the VAT cash accounting or annual accounting schemes; or
- Make VAT payments on account.
HMRC has a specific page to assist with any issues in making payments or you can contact the Payment Support Service on 0300 200 3835. Alternatively, get in touch with your usual M+A Partners contact or email firstname.lastname@example.org