Can I Get Time to Pay VAT to HMRC??

If your business can’t make its VAT payment, will HMRC give you time to pay.

The short answer is yes, but they are more vigiliant around VAT than other areas of tax, because the VAT charged on anything has always been their money. They simply use businesses as tax collectors on their behalf. As such you’ll need have a convincing case, communicate with them clearly, and ensure you’re keeping accurate records.

What are the Criteria for a Time to Pay Arrangement for VAT?

HMRC’s basic criteria is as follows:

  • Are you in good standing with them? Do you pay taxes on time, respond to communicatations etc – they are more likely to accept if this is the case.
  • Have you an existing time to pay arrangement in place? – Again, they are much more likely to agree if you don’t already have a plan in place.
  • If you’re suggesting to them a 12 month payment plan, can you afford to pay in the installments you’re suggesting?
  • Have you got evidence to show them that you can meet the payment plan. For example, sales forecasts, or a cost-cutting plan.

In addition to these things, they’ll be examining their own internal data which tells them whether your particular industry is under particular strain; whether similar businesses to yours are seeking payment plans, and so forth.

Generally speaking, if your business remains viable and they feel your situation to be a temporary blip which some breathing space which help, they’ll agree. They will be more hesitant where there’s been any kind of history of non-communication or existing debts. HMRC are fundamentally supportive to British businesses and they want you to succeed. Equally, as the nation’s largest creditor they have strict protocols about when and how they will show flexible. Understanding these and demonstrating the qualities they’re looking for are the best way to get your business the time to pay agreement it needs.

What about VAT Payment Plans Due to Coronavirus?

COVID-19 has made it significantly easier than before for most businesses to obtain a time to pay arrangement. HMRC is doing everything it can to help businesses weather the difficult economic climate and this means they are giving TTP arrangements more readily and for longer periods of time.

For this reason they offered the VAT deferral scheme which permitted them to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021.