Self-Employed apply online to HMRC to spread the cost

02 October 2020

Self-Assessment individuals can apply online for additional support to help spread the cost of their tax bill into monthly payments from 1 October 2020 without the need to call HMRC

The online payment plan service can already be used to set up instalment arrangements for paying tax liabilities of up to £10,000, however, from 1 October 2020, HMRC has increased the threshold to £30,000 for Self-Assessment individuals, in the hope to help ease any potential financial burden they may be experiencing due to the current  coronavirus pandemic.

The increased self-serve Time to Pay limit of £30,000 comes following the Chancellor of the Exchequer’s announcement on 24 September to increase support for businesses and individuals through the uncertain months ahead.

As part of his speech, the Chancellor announced that Self- Assessment individuals could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019 to 2020 and their first payment on account bill for this current tax year in monthly instalments, up to 12 months, via this self-serve tool. Individuals who need longer than 12 months to settle their tax liabilities are invited to contact HMRC in the usual way.

Financial Secretary to the Treasury, Jesse Norman, said:

“We are supporting jobs by giving more breathing space to up to 11 million Self-Assessment taxpayers when managing their tax affairs.

Enhancing Time to Pay should ease the financial burdens and protect the livelihoods of these taxpayers, as they navigate the months ahead.”

There are more than 11 million individuals who complete a Self-Assessment tax return each year. Once they have completed their tax return for the 2019 to 2020 tax year, those who have payments to make may have the option of using the online self-serve Time to Pay facility through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

HMRC have estimated that around 95% of Self-Assessment individuals who are due to make payments on 31 January 2021 could qualify to implement a Time to Pay arrangement using the self-serve Time to Pay facility online, without needing to speak to an HMRC adviser.

Those who wish to set up their own self-serve Time to Pay arrangements must meet the following requirements:

• They need to have no outstanding tax returns, no other tax debt and no other HMRC payment plans in place
• The debt needs to be between £32 and £30,000
• The payment plan will need to be set up no later than 60 days after the due date of the debt

If using self-serve Time to Pay, individuals will be required to pay any interest on the tax owed and it will be applied to any outstanding balance from 1 February 2021.

As ever, please be aware of scams claiming to be from HMRC, offering to help you set up payment plans to pay any tax owed. These scams are trying to gather your details to steal your money. Check GOV.UK for information on how to recognise genuine HMRC contact. Please send any emails that you believe to be a scam to [email protected]

• General payroll
• Coronavirus (Covid-19)

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