How Do I Set up a Payment Plan for My Tax Bill?

24 December 2020

Originally published on December 24, 2020, this tax bill payment plan post underwent updates on August 30, 2023, for freshness, accuracy, and comprehensiveness.

Once you have submitted your tax return, you will know how much you are due to pay by 31 January

To arrange an instalment plan (a ‘time to pay’ agreement), you will need your Government Gateway account details to log on to HMRC’s online tool.

You must meet all the following criteria to be eligible:

  • No outstanding tax returns, debts or existing payment plans with HMRC
  • Owe no more than £30,000
  • You must set the payment plan up within 60 days of the original payment date
  • You have to pay the instalments by direct debit.

The system will prompt you to indicate if you would like to make a lump sum payment, specify the instalment amount, and choose a payment period (up to a maximum of 12 months).

Regrettably, arranging an instalment plan with HMRC does not exempt you from interest charges, which will accrue from 1 February.

You should avoid any late payment penalties if an instalment plan is in place and stuck to.

If unable to use HMRC’s online tool, call 0300 200 3822 for payment plan setup discussions.

For payment periods over 12 months, HMRC might require income and expense details before agreeing to the extended plan.

We work with our clients to minimise tax and grow their business. If you would like to speak to one of our team, please get in touch.

Jenny Sharma FCCA CTA,Senior Tax Manager
How Do I Set up a Payment Plan for My Tax Bill?

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