Following the announcement by Chancellor Rishi Sunak on 24 September of additional measures to help businesses and taxpayers hit by the Covid-19 pandemic, HMRC have launched an online payment plan service that individual tax payers can access to help spread their Self Assessment tax liabilities.

Tax payers can use this service to spread the payment of their taxes that fall due for payment on 31 January 2021 (this could include any tax so far deferred from 31 July 2020, together with the usual tax payments due at 31 January 2021). The application process is wholly online, and tax payers will not need to phone HMRC to set up the payment plan. This self-serve tool can be used to spread these tax liabilities over a period of up to 12 months, and a direct debit arrangement will need to be set up. 

Taxpayers who wish to set up their own self-serve Time to Pay arrangements must meet the following requirements:

• they need to have no:

  • outstanding tax returns
  • other tax debts
  • other HMRC payment plans set up

• the debt needs to be less than £30,000

• the payment plan needs to be set up no later than 60 days after the due date of a debt

The service is available now, and more detail about it can be found on the GOV.UK website here.

Note that any liabilities settled using this self-serve Time to Pay arrangement will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

For those tax payers whose tax liabilities are greater than £30,000, or who may be looking to extend a payment plan over more than 12 months, they will need to speak to HMRC about their specific circumstances. They will need to call the HMRC Self Assessment Payment Helpline (0300 200 3822).

For further information, please do not hesitate to contact me or your local Thomas Westcott office.

By Chris Hill, Partner