You can set up payment plans:
- In arrears – Payment plans for outstanding tax (Time to Pay Arrangement), and
- In advance – Budget planning for future liabilities
If you have fallen behind:
From the end of last year, HMRC increased the maximum tax debt that can be included when making a time to pay arrangement online, to £30,000 for personal taxes and £50,000 for PAYE and VAT for businesses.
Anyone that cannot pay their tax bill can apply online to set up a time to pay arrangement with HMRC. This includes individuals with self-assessment liabilities, employers with pay as you earn (PAYE) debts and businesses with outstanding VAT bills.
The debt must be paid off within 12 months and you must have no other payment plans or debts with HMRC.
If the criteria are not met or a longer period is required, it may still be possible to make a time to pay arrangement by phoning HMRC.
HMRC requires a direct debit mandate to be set up and this can only be done by the taxpayer themselves, not by your agent.
Budget planning:
You can set up a Budget Payment plan to make weekly or monthly Direct Debit payments towards your next Self-Assessment tax bill.
Your payments will be used against your next tax bill – this means you’ll have less to pay. Any excess gets rolled forward towards later tax payments.
You must be up to date with any payments from your last Self-Assessment tax bill. Sign in to your online HMRC accounts, select ‘Direct Debit’ and choose the Budget Payment Plan option. Then decide if you want to make weekly or monthly payments and how much you want to pay.
If the amount you’ve paid does not cover all of your next bill, you’ll need to pay the difference on the usual payment date. If you’re in credit, you can ask for a refund.
You can pause payments for up to 6 months if you need to.
You’ll need to use your 11-character payment reference when you set up a new Direct Debit. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’.
You can amend your payment amount either up or down at any time.
You’ll find more information on both options on the HMRC website
