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The deadline for submitting a self assessment tax return for the tax year 2023/24 has passed, but many taxpayers who have submitted their return may struggle to pay their tax bill on time.
Financial Times journalist and host of the podcast Money Clinic, Claer Barrett, is urging anyone who is struggling to pay to get in touch with HMRC.
On her Facebook page, Barrett, who has a weekly slot on the ITV1 Lorraine Kelly show, told her followers about an HMRC scheme.
She said that anyone who had missed a tax deadline or know they will not be able to pay a tax bill on time should contact HM Revenue and Customs (HMRC) as soon as possible
If you cannot pay your tax bill in full, you may be able to set up a payment plan to pay it in instalments.
This is called a ‘Time to Pay’ arrangement.
You will not be able to set up a payment plan if HMRC does not think you will keep up with the repayments. If HMRC cannot agree a payment plan with you, they’ll ask you to pay the amount you owe in full.
This scheme’s arrangements are based on the specific financial circumstances of whoever owes a debt, so there is no ‘standard’ Time to Pay arrangement.
HMRC will look at what you can afford to pay and then use that to work out how much time you need to pay.
A Time to Pay arrangement can cover all outstanding amounts overdue, including penalties and interest.
HMRC said: “The arrangement is designed to be flexible and is not a fixed, formal contract. It can be amended over time, so it can be shortened if your earnings rise or if you receive a cash windfall (for example, an inheritance). It can also be lengthened if your essential expenses increase, or your income reduces.
“Over 90% of our Time to Pay arrangements are completed successfully.”
HMRC typically expects you to pay no more than 50% of your disposable income. This may be higher if you have a very high disposable income.
The length of the arrangement will depend on:
- how much your business owes
- the business’ financial circumstances
The arrangement will be reviewed regularly and can be adjusted over time.
You may be able to set up a payment plan online for self-assessment bills. This will let you pay your self-assessment tax bill in instalments without contacting HMRC.
You can set up a payment plan to spread the cost of your latest Self Assessment bill online without calling HMRC if:
- you owe £30,000 or less
- you do not have any other payment plans or debts with HMRC
- your tax returns are up to date
- it’s less than 60 days after the payment deadline
