From 31 May 2023, VAT-registered businesses that owe less than £20,000 of VAT can set up a payment plan online on the basis that they agree to pay off the VAT within six months.

This is part of HMRC’s wider programme to digitise tax reporting and payments, reducing the pressure on HMRC staff members.

The service is not available to businesses that use the VAT cash accounting or annual accounting schemes or those that make VAT payments on account.

Eligible VAT-registered business can set up a VAT payment plan online via the Government Gateway if they:

• have filed their latest VAT return
• owe less than £20,000
• their bill is due within 28 days of the payment deadline
• do not have any other payment plans or debts with HMRC
• plan to pay off the debt within six months.

The service will be available for sole traders, directors, landlords, partnerships, IR35 personal service companies, farmers and haulage companies, as well as international companies.

Businesses not eligible to use the self-serve time to pay service will have to contact HMRC to negotiate a potential payment plan.