Paying your Self Assessment tax bill in one go can be challenging, especially during times of rising costs and tighter cash flow. If you’re worried about meeting the January deadline, you’re not alone — and there is support available.
HMRC offers a Time to Pay arrangement that allows eligible taxpayers to spread their tax bill into manageable monthly payments. Below, we explain how it works, who can use it, and what to watch out for.
What Is HMRC Time to Pay?
HMRC’s Time to Pay service is designed for individuals who cannot afford to pay their tax bill in full by the deadline. Instead of paying everything at once, you can set up a payment plan to spread the cost over a period of time.
If your Self Assessment bill is £30,000 or less, you may be able to set up a payment plan online, without needing to speak directly to HMRC.
This option is particularly useful for:
- Self-employed individuals
- Sole traders
- Landlords
- Company directors with Self Assessment liabilities
How Does a Time to Pay Arrangement Work?
A Time to Pay plan allows you to pay your tax in monthly instalments, usually by Direct Debit. HMRC assesses what you can reasonably afford based on your financial position.
Key points to be aware of:
- You must have submitted your tax return before applying
- The plan should be set up before missing a payment deadline
- Interest will still be charged on the outstanding balance
- Late payment penalties are generally avoided once a plan is in place
How to Set Up a Time to Pay Plan
If you meet the criteria, setting up a plan is relatively straightforward:
- Log into your Government Gateway account
- Go to the Self Assessment section
- Select the option to set up a payment plan
- Provide details of your income, expenses, and bank account
- Agree to a monthly payment amount you can afford
Once approved, payments will be taken automatically, helping you stay compliant without the stress of a large lump-sum payment.
What you will need:
- Tax reference number
- bank account details (this will need to be authorised to set up a Direct Debit)
HRMC will ask you:
- If you can pay in full
- How much you can repay each month
- If you own any other tax bills
- Income and expenses detail
- If you have any other savings or investments
What If You Owe More Than £30,000?
If your tax bill exceeds £30,000 — or you need longer than 12 months to pay — you’ll usually need to contact HMRC directly to discuss a bespoke arrangement.
These cases can be more complex, and HMRC may ask for:
- Detailed financial information
- Evidence of income and essential outgoings
- A clear explanation of why you can’t pay in full
Important Things to Keep in Mind
- Time to Pay does not delay filing deadlines
You must still submit your Self Assessment return on time to avoid penalties. - Interest still applies
While penalties may be avoided, interest continues to accrue until the balance is cleared. - Early action matters
The earlier you act, the more options you’ll have — and the less likely you are to face enforcement action.
If you’re concerned about your upcoming tax bill or want help managing your payments, getting professional advice early can save time, money, and stress.
Not sure what to do next? Get in touch with WBV Accountants for straightforward advice on your Self Assessment.
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