What to Do If You Can’t Pay Your Self Assessment Tax Bill

Self-Assessment Time to Pay is a tax payment arrangement for individuals and businesses in the UK who owe HM Revenue and Customs (HMRC) money. This option allows taxpayers to pay their tax liabilities in instalments over an agreed period instead of paying the total amount upfront. In this RJF Accounting blog, we’ll explore the ins and outs of Self-Assessment Time to Pay and provide helpful tips on how to make the most of this payment option. 

What If I Can’t Pay My Self-Assessment Tax Bill?

If you are struggling to pay your SATR bill for any reason, the first thing to do is to speak to HMRC. Burying your head in the sand and pretending it will go away will only lead to further issues, not limited to fines and interest on the amount you owe. 

If you owe less than £30,000 in tax, you can ask HMRC to use the Time To Pay scheme, where you can pay the tax you owe in instalments. The good news is that if you apply for the scheme, there are no tax penalties for late payments due, but the downside is that interest is added to the balance. The arrangement is based on your financial circumstances, so be prepared to give HMRC this information. You will usually need to complete an income and expenditure assessment, determining how much you can afford to pay and how much time you’ll need to settle your debt.

How Do I Apply for HMRC’s Time to Pay Repayment Plan?

You can apply to pay HMRC in instalments via the time to pay scheme online via your personal tax account or the tax helpline on 0300 200 3835 (Monday to Friday, 8 am to 6 pm). You will require some personal details and details of your individual financial situation to apply and will also need to meet set criteria, such as:

• set up the Self Assessment payment plan no later than 60 days after the deadline
•  have no outstanding tax returns
•  have no other tax debts
•  have no other HMRC payment plans set up

You might still be able to use Time to Pay if you owe more than £30,000 or need more than 12 months, but this can only be done on a case-by-case basis and by calling HMRC instead of doing it online. 

What If I Don’t Pay HMRC or Apply for Time to Pay?

Several things can happen if you do not apply for time to pay or pay the tax you owe by the 31st January deadline. HMRC will begin to apply penalties and interest to your balance: 

• if you haven’t paid after 30 days – 5% of the outstanding tax plus interest
•  if you haven’t paid after six months – another 5% plus interest
•  if you haven’t paid after 12 months – again, 5% plus interest

HMRC can also take direct debt collection enforcement action against you, such as passing the debt to debt collection agencies or bailiffs, taking you to court, or even taking the money directly from your bank account. 

How Can RJF Accounting Help?

RJF Accounting are here to help with all your self-assessment tax queries! We don’t just help on deadline day; we are here all year round to make sure you are getting the best tax advice and making sure you are paying the right amount of tax when it’s due. We can also help you to make time to pay an application to HMRC and help you get the relevant documents together so that you are prepared!

Our Manchester-based accounting team are here to help no matter your issues, from time to pay advice to how to deal with HMRC. You can call the team on 0161 5040629 or email us at hello@rjf.uk.com to see if we can help you get your plans off the ground! We are open Monday to Friday, 9 am – 5 pm!