Don’t fret, HMRC have recognised that many businesses are having cash flow issues at the moment.
In this instance, we would recommend you consider the available time to pay options set by HMRC. To alleviate VAT pressures, from 31st May 2023, HMRC has been granting certain businesses the option of setting up online VAT payment plans.
These online payment plans will be available to businesses meeting the following conditions:
- For VAT accounting purposes, the cash accounting or annual accounting scheme is not being used,
- VAT payments on account are not being made,
- the latest VAT return has been submitted,
- they owe HMRC £20,000 or less,
- the payment deadline is within 28 days,
- the business does not have any other payment plans or debts with HMRC, and
- they plan on paying off the liability within the next six months.
Should you meet the conditions, an online application can be made, hopefully aiding the immediate cash flow issues. However, as you will appreciate, the 28 day notice period does not give you much time, therefore forward planning is key.
Having an agreed plan in place will mitigate a business’ exposure to late payment penalties being issue, although interest will still be charged at HMRC's official interest rate.
If this online payment plan can’t be utilised, we recommend contacting HMRC as soon as possible to agree next steps.
Date published 12 Jul 2023 | Last updated 12 Jul 2023This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.