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From today, 1st October 2020, Self Assessments customers can apply online for additional support to help spread their tax bills into monthly payments, without the need to call HM Revenue and Customs (HMRC).

The online payment plan service can already be used to set up instalment arrangements for paying tax liabilities up to £10,000. HMRC have increased the threshold to £30,000 to help ease any potential financial burdens that Self Assessment customers may be experiencing due to the Covid-19 outbreak.

The increased self-serve Time to Pay limit of £30,000 follows the Chancellor of the Exchequer’s announcement on the 24th September to increase support for businesses and individuals over the net few uncertain months.

As part of his 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 – 2020 and their first payment on account bill for this current tax year in monthly instalments, up to 12 months, via this self-serve tool. Any customers who may need longer than 12 months to settle their tax liabilities can contact HMRC to discuss this.

Financial Secretary to the Treasury, Jesse Norman, said:

“We are supporting jobs by giving more breathing space to up to 11 million Self Assessment taxpayers when managing their tax affairs.

“Enhancing Time to Pay should ease the financial burdens and protect the livelihoods of these taxpayers, as they navigate the months ahead.”

Once Self Assessment customers have completed their tax return for the 2019 – 2020 tax year, those who have payments to make can do so 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.

It is estimated that around 95% of Self Assessment customers due to make payments on 31 January 2021 could implement the Time to Pay facility online, without the need of speaking to a HMRC adviser.

Customers wishing to set up their own self-serve Time to Pay arrangements must meet the following requirements:

  • They cant have any –
  • outstanding tax returns
  • other tax debits
  • other HMRC payment plans set up

 

  • The debt will need to be between £32 and £30,000.
  • The payment plan will need to be set up no later than 60 days after the due date of a debt.

 

Customers who use 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 1st February 2021.

Be aware of scams claiming to be from HMRC, offering to help you set up payment plans to pay any tax owed. These scams are trying to harvest your details to steal your money. Check GOV.UK for information on how to recognise genuine HMRC contact. Self Assessment customers can set up their own online payment plan to help spread the cost of their tax bill by visiting https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments.

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