Spread your Self Assessment tax bill
According to the government’s Winter Economy Plan, taxpayers are allowed to spread their payment over an additional 12 months from 31 January 2021 via an online self-service Time to Pay facility.
The taxpayers can use the Time to Pay service when their tax bill is between £32 and £30,000 – provided they don’t have:
- any existing tax debts or payment plans already set up,
- tax returns are up to date,
- it is no more than 60 days since the tax was due for payment
The online payment plan service was already in place for tax liabilities up to £10,000, but this has now increased to £30,000 for Self Assessment taxpayers, to help ease the financial impact of the coronavirus pandemic. This can be set up via online self-service, but taxpayers who need longer than 12 months to settle their tax bill can still contact HMRC in the usual way.
Once a tax return for the year 2019-2020 is completed, the taxpayer can set up a direct debit and pay the tax owed in monthly instalments, up to a 12-month period. The majority of self-employed people will qualify for this service and can make the payments without even talking to an HMRC advisor.
Anyone using the facility will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.
Please contact us if you’d like to learn more about this service and think are eligible.