Home Coronavirus HMRC’s pandemic payment terms prove popular

HMRC’s pandemic payment terms prove popular


Almost 25,000 taxpayers have taken advantage of a recent relaxation of the threshold under which tax due to HM Revenue & Customs can automatically be spread into monthly payments.

Following Rishi Sunak’s Winter Economy Plan speech, in October HMRC increased the threshold for its “self-serve time to pay scheme” from £10,000 to £30,000.  This facility allows taxpayers to apply online to split the following into twelve monthly payments:

  • Their deferred payment on account bill from July 2020;
  • Any outstanding tax owed for 2019-20:
  • Their first payment on account bill for this current tax year.

The online self-serve tool will automatically set up the “time to pay” payment plan, provided:

  • The taxpayer has:
    • No outstanding tax returns,
    • No other tax debts,
    • No other HMRC payment plans set up;
  • The debt is between £32 and £30,000;
  • The payment plan is set up no later than sixty days after the due date of the debt.

Therefore, once a taxpayer has filed their January tax return and knows how much tax is due, if they meet the eligibility criteria, they can use the self-serve facility to set up monthly direct debits, spreading the cost of the tax bill.

The self-serve time to pay threshold was increased to help businesses and individuals who have been affected by the coronavirus pandemic.  The plans already set up by the nearly 25,000 taxpayers who have already taken advantage of the facility total £69.1 million.  To date, the average value of payments plans set up online is £2,821.

“We know the past year has been tough for many businesses and self-employed people, which is why we’re helping them spread the cost of their tax bill into monthly payments,” Karl Khan, HMRC’s interim director general for customer services said.

“Self-assessment customers can use the self-serve time to pay facility for amounts up to £30,000 with almost 25,000 customers already benefiting from the service.”

Taxpayers can apply for the payment plan via GOV.UK.

Additionally, taxpayers who are required to make payments on account and know their bill is going to be lower than the previous tax year can reduce their payments.  HMRC advises individuals in this position to visit GOV.UK to find out more about Payments on Account and how to reduce them.

Taxpayers that owe more than £30,000 but cannot pay their self-assessment tax bill may still be able to set up a time to pay arrangement by calling the Self-Assessment Payment Helpline on 0300 200 3822.

14th January 2021.