Using HMRC Payment Plans

Businesses and self-employed people in financial difficulties who have outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

An online payment plan for self-assessment tax bills can be used to set up instalment arrangements for paying tax liabilities up to £30,000. Taxpayers that qualify for a Time to Pay arrangement using the self-serve Time to Pay facility online, can do so without speaking to an HMRC adviser. The service will create a bespoke monthly payment plan based on how much tax is owed and the time needed to pay. The service was used by over 142,000 taxpayers for the 2021-22 tax year to spread the cost of over £475m in tax.

Taxpayers that want to use the online option for their 2021-22 tax return must meet the following requirements:

• have filed their tax return for the 2021-22 tax year

• owe less than £30,000

• plan to pay their debt off within the next 12 months or less

Taxpayers with self-assessment tax payments that do not meet the above requirements need to contact HMRC to request a Time To Pay arrangement. These arrangements are agreed upon a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC will usually only offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full now but will be able to pay in the near future. If HMRC does not think that more time will help in paying what is owed, they can require immediate payment of a tax bill and start enforcement action if payment is not forthcoming.