Further provisions to help those within self-assessment settle tax liabilities (including your July 2020 and January 2021 payments) are now available.

These enhancements to the ‘Time to pay’ scheme will allow many within self-assessment to apply online to spread their tax bill over a further 12 months from 31 January 2021.

The taxpayer must meet the following requirements:

  • Their outstanding Self-Assessment tax bill must be between £32 and £30,000
  • All their tax returns should be up to date with no outstanding tax returns
  • They must not have other personal tax debts outside of self-assessment.
  • They must not have other HMRC payment plans set up in their own name.
  • The payment plan must be set up no later than 60 days after the due date of the tax

This service allows the tax to be paid via direct debit over a period of up to 12 months. Whilst this protects the taxpayer from late payment penalties, it is important to note that interest will still be applied to any outstanding balance from 1st February 2021. From 07/04/20, the interest rate applied is 2.6% of the outstanding tax bill.

Unfortunately, this is not something that agents can do on your behalf. The taxpayer must apply for the Time to Pay scheme using their own government gateway account. With this in mind if you do not already have a government gateway account, and you wish to set up a time to pay arrangement, you should register for this now. This can be done using the following link:

https://www.gov.uk/log-in-register-hmrc-online-services/register

If your self-assessment debts are over £30,000, or you need longer than 12 months to pay your debt in full, you may still be able to set up a Time to Pay arrangement by calling the Self-Assessment Payment Helpline on 0300 200 3822.

Further guidance is available can be found using the following link:

https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments