The limit for a self-serve time to pay arrangement, which was increased during the pandemic, remains at £30,000 tax due.
If taxpayers can’t pay their 2020/21 self assessment (SA) tax liability in full by the due date (generally 31 January 2022), they can set up their own time to pay arrangement online if they:
- have filed their tax return for 2020/21;
- owe less than £30,000;
- are within 60 days of the payment deadline; and,
- plan to pay their debt off within the next 12 months or less.
If taxpayers owe more than £30,000, or need longer to pay, they should phone the self assessment payment helpline on 0300 200 3822 to make an arrangement.
To avoid a 5% late payment penalty, the Tax Faculty advises taxpayers to set up the arrangement within 30 days of the due date (generally by 1 March 2022), although the service is available for 60 days following the due date.
The service has proved to be popular to date with more than 20,000 SA taxpayers using it since April 2021 to spread £46m of tax due for 2021/22. Last year, 123,000 taxpayers used it to spread the cost of £460m of 2019/20 liabilities.
Unfortunately, the self-serve time to pay facility is not available to agents as HMRC can only accept direct debit mandates set up by taxpayers themselves.
SA taxpayers making payments on account who know that their 2021/22 tax bill is going to be lower than 2020/21 bill may wish to take action to reduce their payments on account.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
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