If you’re finding it difficult to settle your self-assessment tax bill in full, this article will guide you on how to establish an online payment plan, referred to as a Time to Pay Arrangement. The convenience of doing this online means that it’s not necessary to make a call, and you can do it whenever suits you. But before you commence, carefully contemplate whether you are capable of paying all the tax you owe. If you can, you should do so to prevent any potential interest. If not, read on to get started.
Contents
Setting up a payment plan
To kickstart, navigate to gov.uk and in the search bar, type ‘if yu cannot pay your tax bill on time’.
Then select ‘setting up a payment plan’.
Make sure to peruse the self-assessment section attentively. There, you’ll find details about who can establish a plan online. If you are unable to, do not fret. You can call us to explore various choices. Do ensure to read the remaining part of this content, as the information needed is identical.
If you meet the criteria, click the link to initiate a self-assessment payment plan online now.
Log into your HMRC online services.
Upon logging in, choose ‘set up a payment plan if you cannot pay in full’.
After briefly reading the page, click ‘start now’ and you’ll be presented with the amount of tax you owe.
For additional information about your tax bill, click on ‘self-assessment statement’ and ‘continue’ when you’re ready.
Creating an upfront payment
You will now have the option to make an upfront payment. Do this if you can, as this could lead to a decrease in your monthly instalments and interest. Choose your preferred option and if you are making an upfront payment, input the amount you wish to pay then continue.
If an upfront payment was made, it will reflect in deductions from your remaining balance to pay. Your payment plan will cover any remaining balance. Upon this, select ‘continue’.
Choose your preferred day of the month for payment and we’ll verify whether your monthly payments are affordable. Learn how we calculate your plan by clicking here. Click ‘continue’ when ready.
Determining your monthly income
We’ll now inquire about your income and expenditure to better comprehend your financial standing. When prepared, select ‘add income’.
Find examples under each category of income to aid the process. After inputting all necessary amounts, press ‘continue’.
You should now see your income. Validate, and if any corrections are needed, go back and make them. Subsequently, press ‘add spending’ and provide the amount you expend monthly across the shown category. If you share costs with anyone else, only include your portion. After this, select ‘continue’.
Reviewing your income and expenses
Check if the information is right. If you neeed to correct anything, go back and change it. At the bottom of thispage you will see you Left over income, select Continue.
After the review, if you discover that you cannot settle your tax in full within 24 months, unfortunately, we can’t establish a payment plan for you online. However, we’re still accessible to assist. If you can pay within 24 months, you’ll see your payment options displayed. Bear in mind, the longer the payment period, the higher the interest you’ll accrue.
Confirming your payment plan
If you are unable to afford the payment options, click the relevant option to uncover information about contacting us for help.
You will then view a summary of your payment plan. Thoroughly ensure all details are accurate. Make any requisite adjustments by simply selecting ‘change’. When you’re ready to proceed with the plan, press ‘agree and continue’.
Establishing the direct debit
Next, input your bank account details to set up a direct debit. Assure the direct debit lines up with your bank account information.
Now, for the final step; go through the terms and conditions and select ‘agree and continue’ if you’re happy to proceed.
You will then be directed to a page confirming the establishment of your plan. A letter will be sent to you confirming your payment dates. It’s recommended to take a snapshot of this page for future reference. On your bank statements, look out for your payment reference.
Navigating through the process of setting up a self-assessment payment plan online offers a convenient and efficient solution for taxpayers. By following the step-by-step guide outlined, individuals can seamlessly manage their tax obligations without the hassle of paperwork or long wait times. This digital approach not only streamlines the payment process but also empowers taxpayers with greater control over their financial responsibilities.
