Self-Assessment customers to benefit from enhanced payment plans

As mentioned in our Winter Economy Plan newsletter, the Chancellor has recently announced changes to the Time to Pay facility allowing easier online access, but from 1st October he has allowed more flexibility for people to pay their personal self-assessment tax bills. We now have further details as to how these changes could benefit you in our latest blog below.

LWA October 2020 Blog 2 - Self-assessment support - Calculator Image by Shutterbug75 from Pixabay
What are the changes?
On 23rd March, at the outset of the economic impact of Coronavirus, anyone that was due to pay their self-assessment tax bill was given the opportunity to apply for an installment facility by contacting HMRC.

In July, the ‘Time to Pay’ application facility was adapted online so that people did not have to speak to a HMRC representative over the telephone to request payment support up to the amount of £10,000.

From 1st October, the online application limit of £10,000 has been extended to £30,000 meaning if you need support paying your self-assessment tax bill between £32.00 and £30,000, you can use the Time to Pay online facility to do so.

Which tax periods does the support cover?
As part of his Winter Economy Plan speech, the Chancellor announced that self-assessment customers could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019 to 2020 and their first payment on account bill for this current tax year in monthly instalments, up to 12 months, via the self-serve tool.

Once you have completed your tax return for the 2019 to 2020 tax year, if you have payments to make, you may have the option of using the online self-serve Time to Pay facility through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

If you need longer than 12 months to settle your tax liabilities, you will need to contact HMRC by calling the self-assessment Payment Helpline on 0300 200 3822.

How do I know if I qualify?
It is estimated that around 95% of self-assessment customers who are due to make payments on 31 January 2021 could qualify to implement a Time to Pay arrangement.

If you wish to set up your own self-serve Time to Pay arrangements without the need to speak to a HMRC advisor, you must meet the following criteria:

  • No outstanding tax returns
  • No other tax debts
  • No other HMRC payment plans set up
  • The debt needs to be between £32.00 and £30,000
  • The payment plan needs to be set up no later than 60 days after the due date of a debt


More about the Time to Pay changes at Gov.uk
Anyone using self-serve Time to Pay will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

You can find out more at Gov.uk here.

If you’d like any advice on filing your self-assessment tax return, or if your business or personal finances have been impacted by Coronavirus, please take a look at our website, or you can contact our team of Tax experts in Warrington on 01925 830 830 or in South Manchester on 0161 905 1801, who will be happy to help.

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