Date posted: 9th Jan 2023
Taxpayers unable to settle their tax liability on time may be able to make a Time to Pay arrangement with HM Revenue and Customs (HMRC).
Self-Assessment
If you are a Self-Assessment customer, you may be able to set up a Time to Pay arrangement online through your Government Gateway account if the following criteria are met:
- Your most recent tax return due has been filed,
- You owe less than £30,000,
- You are within 60 days of the payment deadline,
- You plan to pay what you owe within 12 months or less.
Please note that HMRC will charge interest on amounts being paid via a Time to Pay arrangement. The interest rate rose to 5.5% on 22 November 2022. If the Time to Pay arrangement is set up before the late payment penalty deadline (currently 30 days after the payment deadline), penalties will not be charged.
If it is not possible to make a Time to Pay arrangement online due to owing more than £30,000, needing longer than 12 months to pay, not being a Self-Assessment customer or another reason, HMRC can be contacted by telephone on 0300 200 3822 between 8am to 6pm, Monday to Friday.
HMRC will discuss your circumstances to look at agreeing an instalment arrangement, holding off debt collection proceedings and potentially cancelling penalties and interest if you have had difficulties contacting HMRC or paying HMRC.
The following should be noted:
- If you know that you will have difficulties making tax payments, HMRC should be notified 1-2 weeks before the payment due date,
- Time to Pay arrangements are specific to the circumstances of each individual customer and are based on income and expenditure, what you can afford to pay and how long you need to pay,
- Time to Pay arrangements can also cover outstanding penalties and interest,
- Time to Pay arrangements are flexible and can be amended should you have a change in circumstances.
- HMRC may request further detail such as cashflow forecasts, budgets and details of assets and liabilities to help understand your circumstances further,
- It is easier to obtain a Time to Pay arrangement for Income Tax and Corporation Tax, so consider paying other tax debts first if applicable, such as VAT, PAYE and NIC,
- Future tax liabilities must be paid on time, or Time to Pay arrangements renegotiated to include these.
Further guidance from HMRC:
If you have any queries regarding the payment of your taxes, please give us a call.
