Struggling to pay your self assessment tax bill?
If you are unable to pay your self assessment tax bill, there are a few options you can consider.
You may be able to set up an HMRC payment plan yourself using HMRC Time to Pay.
HMRC says if you can pay on time, you should. But if you’re facing financial hardship or personal difficulty, you might be able to pay your tax in instalments.
You can set up a Time to Pay plan by yourself for Self Assessment if you owe less than £30,000 and meet other conditions.
Time to Pay – can you pay HMRC in instalments?
Time to Pay is an arrangement offered by HMRC that allows taxpayers who are unable to pay their taxes on time to spread the payments over a longer period of time. This service is intended to help taxpayers who are experiencing temporary financial difficulties.
To set up a Time to Pay arrangement, you will need to contact the HMRC and explain your financial situation. You will need to provide evidence of your income, expenses, and assets, as well as your ability to pay the taxes you owe.
Good news is that you may be able to do this online in the first instance, via this link if you have a government gateway account.
You can spread your payment over 12 months by Direct Debit. You need to:
have no outstanding tax returns
have no other tax debts
have no other HMRC payment plans set up
set up the Self Assessment payment plan no later than 60 days after the deadline
If you have more than £30,000 owned or need more than 12 months, you’ll need to call the helpline instead.
The number is 0300 200 3822 and it’s open Monday to Friday 8am to 6pm. Ask about Time to Pay.
It's important to note that Time to Pay arrangements are only available for certain types of taxes, and not all taxpayers will be eligible. Additionally, interest will continue to accrue on the outstanding tax debt during the Time to Pay arrangement, so it's important to consider the long-term financial implications of this option.
It's also important to keep in mind that while Time to Pay can provide a temporary solution, it's important to address the underlying financial issues that led to the inability to pay the tax bill on time.
HMRC won’t typically ask you to pay more than 50 per cent of your disposable income.
What happens if you don't pay your self assessment tax bill?
If you don’t pay tax (and don’t set up an HMRC Time to Pay arrangement) you’ll get fines:
if you haven’t paid after 30 days – five per cent of the outstanding tax plus interest
if you haven’t paid after six months – another five per cent plus interest
if you haven’t paid after 12 months – again, five per cent plus interest
HMRC have an online tool to help you calculate fines if you pay late here.
If you ignore your tax bill and do not contact HMRC, they can take you to court, collect money directly from your bank account, or use debt collection agencies to retrieve the tax you owe.
