Get extra time to pay your taxes with HMRC

Contact HMRC to set up a TIME TO PAY (TTP) arrangement for your next self-assessment tax payment.

To support individuals struggling to pay their taxes, HMRC is encouraging the use of its online tool to set up an instalment plan for self-assessment payments. The tool can deal with payments due of up to £30,000. A self-serve process means that provided you meet all the relevant criteria, a short-term TTP arrangement can be put in place without discussing it with HMRC and without giving details of current income and expenditure.

Agents cannot set up the required direct debit in their customers’ names. Only you can make a TTP arrangement with HMRC. You have 60 days before or after a payment deadline to set up a TTP.

Online applications

• • 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 over up to 12 months
  • It would be best if you waited three full days after your tax return has been filed to set up an online TTP arrangement
  • The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and over what period

You need to meet the following requirements to set up your own time to pay arrangement:

1. 1. Have no:
      1. other HMRC payment plans set up
      2. other tax debts
      3. outstanding tax returns
   2. The total debt needs to be under £30,000
   3. The payment plan needs to be set up:
      1. No later than 60 days after the due date of debt, this will be the 1 April for a 31 January payment date or 29 September for a 31 July payment date
      2. No earlier than 60 days before the due date of debt, this will be the 3 December for a 31 January payment date or 2 June for a 31 July payment date.

Interest will be charged.

Interest accrues from the due date on TTP arrangements for all tax outstanding at the HMRC late payment interest rate until cleared. 

Late payment penalties may apply.

After 30 days (3 March), there is an automatic 5% late payment penalty due on any unpaid tax balance. The 5% penalty applies again to any outstanding tax balance after six months (31 July) and 12 months (31 January).

Penalties are suspended if you have a payment arrangement in place before the dates the penalties are applied. However, breaking your TTP agreement will make you liable for the penalties.

If you need longer than 12 months, your debt is over £30,000, or you can’t use the online service, you will need to call HMRC

You can set up a TTP arrangement by calling:

1. 1. The Self Assessment Payment Helpline on 0300 200 3822 or
   2. the coronavirus helpline 0800 024 1222.

Both are open Monday to Friday from 8 am to 6 pm. It is closed on bank holidays and weekends.

I find that calling first thing in the morning has shorter waiting times. Lines will always be super busy around the payment deadlines. 

Remember that you can set up a TTP within 60 days after a payment deadline. Do not get too stressed if you do not have a plan before your payment is due. 

You will need the following for your phone call:

1. 1. To quote your 10-digit unique taxpayers reference (UTR) or National Insurance number during the call.
   2. your bank details to make the payment 
   3. a cuppa and to be prepared for an hour-long wait on hold
   4. HMRC may ask you:

1. 1. 1. why you’re not able to pay, and what your current financial circumstances are — see below for ‘How does HMRC work out what you need to pay them.’
      2. what have you done to try to pay your bill on time and in full
      3. about your current financial position (including income and expenditure, savings, investments and other assets)
      4. how do you expect your finances to change in future
      5. questions to check if a Time to Pay arrangement would be the best payment solution

How does HMRC work out what you need to pay them?

HMRC will decide your ability to pay using an ‘income and expenditure assessment’ form. This looks at your income, disposable assets and expenditure to help them work out your disposable income. 

HMRC expects you to pay no more than 50% of your disposable income. This may be higher if you have a very high disposable income. There’s no upper limit on how much time someone can have to pay.

Be nice

Taking action may be stressful when contacting HMRC, but remember, they are there to help you pay your taxes. Contacting them is better than making no contact at all. Usually, I find the nicer I am to them, the more willing they are to help.