HMRC has confirmed that businesses can now set up a payment plan online if they owe less than £20,000 in unpaid VATAs of 31 May 2023, VAT-registered businesses that owe less than £20,000 of VAT can set up a payment plan online as long as they agree to pay off the VAT within six months. These payment plans are usually described as time to pay agreements by HMRC.The measure is part of HMRC’s wider programme to digitise tax reporting and payments, reducing the pressure of HMRC advisers.‘Providing customers the ability to set up online payment arrangements will reduce the contact needed with HMRC, saving on both time and resource for Debt Management Operations,’ HMRC said.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:filed their latest VAT return;owe £20,000 or less;their bill is due within 28 days of the payment deadline;do not have any other payment plans or debts with HMRC; andplan 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.