HMRC appear to have been helpful, from 31 May 2023 if a VAT registered business owed less than £20k in VAT, they are now able to set up a payment plan for this online. This might also help with the closure of several telephone lines within HMRC and the long call wait times – See below for the details.

To set up a VAT payment plan the business needs to:

• Be VAT registered
• Have filed its latest VAT Return
• Owe £20k or less
• Is within 28 days of the payment deadline
• Does not have any other payment plans in place with HMRC or debts with HMRC
• Plan to pay off the debt within the next six months

However, there are some exceptions – those using the cash accounting or annual accounting scheme being the key ones.

The biggest barrier to being able to use this to set up a payment plan will be for those businesses who put payment plans in place for their VAT on a regular basis – if you owe VAT on any other payment plan (or a Corporation Tax payment plan, or a PAYE payment plan) then you won’t be able to do this.

This doesn’t mean you won’t be able to put a payment plan in place, it just means you will need to call HMRC to do so. If you’d like to know any further information on anything mentioned, or anything accounting related for that matter, please do not hesitate to get in contact with us.