July 2023 VATwatch

In an attempt to simplify and automate the payment of VAT to HMRC, they have now made it possible for certain businesses to set up an online ‘Time to Pay’ payment facility.

Instead of calling HMRC’s Business Payment Support Service to discuss terms of a payment plan (which can have varying results depending on who you speak to on any given day!), businesses who meet the criteria for the online facility can set up a payment plan via their government gateway.

It is highly recommended that a business that can’t pay a VAT liability immediately sets up a ‘time to pay’ plan before incurring penalties from HMRC.

To apply for an online payment plan, the following conditions must be met:

1. The latest VAT return has actually been filed
2. The amount owed to HMRC is £20,000 or less
3. Application is made within 28 days of the deadline
4. The business doesn’t have another active time to pay agreement or any other debts with HMRC
5. The maximum repayment term is six months

You can apply via your government gateway account.

HMRC has issued new guidance to help businesses to check whether they need to report errors in their VAT Return, and how to go about doing so if it is necessary to notify HMRC.

The guidance contains a link to a new online service, which will check whether the error can be rectified by making an adjustment in the VAT Return, or whether HMRC must be separately informed of the error.

Thank you for taking the time to read this VATwatch round-up.