Spreading your January self-assessment payment
By Andrew Hague, Partner
As we approach the self assessment payment deadline, many taxpayers remain concerned about having enough funds to pay their self-assessment income tax bill.
The good news is that HM Revenue & Customs (HMRC) does have a facility for spreading out your income tax payments. HMRC’s ‘time-to-pay’ arrangement allows you to pay your tax bill in pre-agreed installments, with a small amount of interest added on for the use of this service.
How does the time-to-pay scheme work?
The time-to-pay scheme relates to HMRC’s online payment plan service, allowing you to come to an agreement about deferring your tax bill and spreading the costs over several months.
The amount that you can spread will include the balance of your 2020/21 tax and the payments on account towards the 2021/22 tax bill. Some other considerations of the facility include:
Interest will be charged from 1st Feb 2022 – currently at 2.6% p.a.
You need to choose how much to pay initially and how much you will then pay monthly.
If a payment is missed, the whole amount can be demanded by HMRC.
If an arrangement is set up, this avoids any enforcement action to collect your due taxes, i.e. calling in debt collectors etc.
Talk to us about agreeing a time-to-pay arrangement
If you’re concerned about not being able to pay your January self-assessment income tax bill, please do come and talk to us. We’ll review your financial situation, your liquid funds and will work out how much you can realistically afford to pay.
Get in touch to talk about an online payment plan.
