Skip to main content

Many people submitting self-assessment returns maybe struggling to pay their tax bill. The 31 January deadline is difficult at the best of times, thanks to the Christmas break interrupting payments. But Covid restrictions could make it even more tricky!

Apart from reduced income this year, there’s a chance tax bills maybe higher if coronavirus support grants were received. If this is news to you, check out our earlier blog.

As well as paying what you owe by midnight on 31 January, you must also pay any Class 4 and Class 2 National Insurance liabilities for 2020/21. All these payments could mean you are struggling to pay what you owe.

So what can you do? Our first tip is not to panic and do not delay in sorting the problem.

Tips if you’re struggling to pay your tax bill

Contact HMRC

Burying your head in the sand is never a good idea – and that is certainly the case with HMRC. The problem will not go away, so if you are struggling to pay what you owe by 31 January, speak to HMRC as soon as you can.

Even though the deadline for penalties has been pushed back to February, our advice is not to delay. Despite public opinion, they are happy to help come up with an arrangement so you can pay what you owe.

Pay in instalments

You might be able pay what you owe in instalments by setting up a time-to-pay agreement. You can do this yourself via your Government Gateway account if you:

  • Have filed your latest self-assessment tax return
  • Owe less than £30,000
  • Are within 60 days of the payment deadline and
  • Plan to pay back what you owe within the next 12 months or less

If you do not meet all the criteria you will not be able to set up an instalment payment plan online. HMRC may allow you to agree one if you speak to their Self-Assessment Payment Helpline on 0300 200 3822.

You will need all your information to hand including your National Insurance, bank account details and details of previous payments you have missed. You will also need your VAT registration number if registered for VAT.

HMRC will take into account what you are able to pay in full, your monthly income and outings and any savings and investments you have. They will then take into account what you can afford to repay each month. You will be expected to use your savings and investments to clear your tax bill.

Failing to make any payments or set up a time-to-pay agreement means you will be expected to pay what you owe in full. HMRC may you debt collection powers if you do not do this.

To stay compliant, you can speak to our team for expert advice