As recently announced by the Chancellor, self-assessment taxpayers can now apply online through the government gateway to spread the cost of their tax bill into monthly payments without the need to contact HMRC directly. With an increase to £30,000 for self-assessment customers, this so-called ‘Time to Pay’ service is to assist with Covid related financial pressures.
Once your tax return is completed for the 2019-20 tax year you can use the online ‘Time to Pay’ service and set up a direct debit to pay any tax owed in a 12 month period by monthly instalments.
In order to set up your own self-serve 'Time to Pay', the following requirements must be met:
- There are no outstanding tax returns
- There are no other tax debts
- There are no other HMRC payments set up
- The Self-Assessment tax bill is between £32 and £30,000
- It is no more than 60 days since the tax was due for payment.
If you do not meet these requirements, you could still qualify for Time to Pay, but you will need to call HMRC to set this up on 0300 200 3822 Monday to Friday, 8am to 4pm.
It is important to note, that if you set up a 'Time to Pay' arrangement, you will have to pay interest on the tax paid late and this will be applied to any outstanding balance from 1 February 2021.