Self-assessment ‘time to pay’ threshold raised to £30,000

HMRC has made it easier for self-assessment taxpayers to pay the tax they owe incrementally on a monthly basis, by extending the threshold for ‘time to pay’ applications, as part of efforts to ease financial stresses cause by the pandemic


From 1 October, the limit for time to pay, the online payment plan service used to set up instalment arrangements for paying tax liabilities, is increased to £30,000, up from £10,000.


Self-assessment taxpayers can pay any outstanding tax owed for 2019/20 and their first payment on account bill for this current tax year in monthly instalments, rather than as two payments in January and July.


Once the 2019/20 tax return is completed, those who have payments to make have the option of using the online self-serve time to pay facility to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.


HMRC estimates around 95% of self-assessment taxpayers who are due to make payments on 31 January 2021 could qualify to implement a time to pay arrangement using the online facility, without needing to speak to an HMRC adviser.


Those wishing to do so must meet a set of requirements. To quality a taxpayer must not have any outstanding tax returns, no other tax debts or no other HMRC payment plans set up. The tax owing needs to be between £32 and £30,000, and the payment plan needs to be set up no later than 60 days after the due date of a debt.


Taxpayers using 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 1 February 2021.


Those with self-assessment tax payments over £30,000, or who need longer than 12 months to pay in full, may still be able to set up a time to pay arrangement by calling the self-assessment payment helpline on 0300 200 3822.


The deadline to complete self-assessment tax returns for 2019/20 is 31 January 2021.



 Blog post uploaded 9 Oct 2020