VAT is normally due on the relevant due date*. However, HMRC has launched a new self-service portal for businesses to set up payment plans.
We look at managing VAT debt in detail here.
A business can set up a VAT payment plan online if it:
- has filed its latest tax 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
- plans to pay off its debt within the next six months
A taxpayer cannot set up a VAT payment plan online if it uses the Cash Accounting Scheme, Annual Accounting Scheme, or makes payments on account.
If a business cannot set up a payment plan online it will need to contact HMRC.
HMRC will ask:
- if you can pay in full
- how much you can repay each month
- if there are other taxes you need to pay
- how much money you earn
- how much you usually spend each month
- what savings or investments you have
If you have savings or assets, HMRC will expect you to use these to reduce your debt as much as possible.
* For businesses that pay their VAT monthly or quarterly, the deadline for both submitting a return and paying the VAT owing is usually one calendar month plus seven days after the VAT period has ended
VAT payment deadline calculator here.