Every business that’s registered for VAT should be aware of the requirement to collect and pay over regular amounts to HMRC. Sometimes though, for a range of reasons, the cash simply isn’t in the bank when it comes time to make your VAT payment. HMRC have now created a self serve time to pay application process, to relieve some of the pressure the situation creates.

The current process

If you can’t make your VAT Payment, you need to call the Business Payment Support Service and explain to HMRC why the payment can’t be made, and to negotiate a payment plan.

This can appear to be a subjective process, and we’ve known business owners receive very different responses. 

The new self serve time to pay process

The new process has some conditions that must be met, but should remove some of the subjectivity if you can qualify.

1. The latest VAT Return must have been filed.
2. The VAT amount payable is £20,000 or less.
3. The online application has to be made within 28 days of the payment deadline.
4. You can have no other active time to pay agreement or any other debts with HMRC.
5. The maximum repayment term is six months.

If you meet these criteria for the new self serve time to pay process, you’ll need to apply online using this link and then log into your Gateway account.

If there are any Returns outstanding or if your liability is above the £20,000 limit, you’ll then see a screen that tells you to call the Payment Support Service instead, but otherwise you’ll work through a series of questions around the payment plan.

This is obviously another step by HMRC towards digitalisation, but hopefully one that will make life slightly easier for business owners faced with a short term issue.

Our View…

Collecting VAT comes with some responsibilities, and that is to be able to pay it over when it’s due. The new VAT penalty regime makes that clear. Our advice would always be to set aside your VAT as the period progresses, to avoid this problem.

That said, we know that this isn’t always possible. When that’s the case, this new Self Serve time to pay process will be helpful. 

If you find that you’re struggling to find your VAT payment on a too-frequent basis, please shout! We can help you put into place some very simple processes that will make it easier and that will relieve the regular pressure and stress. If you’d like to chat about how to do that, please get in touch.