You have until 1 April 2021 to contact HMRC and for Time to Pay (TTP) arrangement for your January 2021 self-assessment tax payment
To support individuals who need time to pay after considering reducing instalment payments, HMRC is encouraging the use of its online tool to set up an instalment plan for self-assessment payments. The tool has been enhanced to deal with payments becoming due of up to £30,000 (increased from £10,000). The self-serve process means that provided you meet all the relevant criteria, a short-term TTP arrangement can be put in place without having to discuss it with HMRC and without having to provide details of current income and expenditure.
Only you can make this arrangement with HMRC. Agents are not allowed to set up the required direct debit in the names of their customers.
If you have a personal tax account or want to register for one and your tax return is filed with HMRC you can apply online using GOV.UK to set up a direct debit and pay any tax that is owed up to a 12-month period.
The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and over what time period.
You need to meet the following requirements to set up your own time to pay arrangement:
- you have no:
- other HMRC payment plans set up
- other tax debts
- outstanding tax returns
- the debt needs to be between £32 and £30,000
- the payment plan needs to be set up no later than 60 days after the due date of debt this will be the 1st April 2021.
- you have no:
Temporary CV-19 changes to penalties, interest and surcharges
- The £100 default late filing penalty for a tax return filed after 31 January 2021 has been extended to 28 February 2021
- Interest will be charged on TTP arrangements tax outstanding at the HMRC late payment interest rate from 1 February 2021 unit cleared. It’s currently interest at 2.6% per annum.
- The 5% surcharge due on any late paid tax has been extended from 3 March to 1 April. This is provided the tax has been paid or a TTP arrangement has been put in place.
If you need longer than 12 months, your debt is over £30,000 or, you can’t use the online service
You can set up a TTP arrangement by calling the Self Assessment Payment Helpline on 0300 200 3822 or the coronavirus helpline 0800 024 1222. It’s open Monday to Friday from 8 am to 6 pm. You will need to quote your 10-digit unique taxpayers reference (UTR) or National Insurance number during the call.
Make a cup of tea and be prepared for at least an hour-long wait on hold, probably longer.
We understand that this is a stressful time for you and your business. HMRC is operating on reduced staff numbers and is working relentlessly to help as many callers as they can – usually we find, the nicer we are to them, the more willing they are to help.