If it is you are struggling to make a tax payment, you should always seek help. The earlier the better, instead of burying your head, as it will not just go away. For those of you struggling to pay your tax due, a time to pay arrangement may be an option.
HMRC offer a time to pay arrangement which is based on your specific financial circumstances and can cover all outstanding amounts overdue including penalties and interest. They make sure to look at what you can afford and then use that to work out how much time you will need to pay off your tax bill.
HMRC usually expects you to pay no more than 50% of your disposable income but can be higher if you have a very high disposable income. There is no upper limit on how much time you will have to pay.
It is designed to be flexible and is not a fixed, formal contract. It can be altered overtime, so it can be shortened if your earnings rise or you receive a windfall. More importantly it can also be lengthened should your essential expenses increase, or income decrease.
For Self-Assessment, you may be able to set up a payment plan online. This would allow you to pay your Self-Assessment tax bill in instalments without contacting HMRC.
You can set up a payment plan to spread the cost of your Self-Assessment bill 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 before the payment deadline
For any extra information on time to pay arrangements or to set up a time to pay arrangement online visit the gov.uk guidance here.
