Some good news!
As a self assessment tax payer, you can apply potentially to spread the cost of your tax bill into monthly payments. This took effect from 1 October 2020 and you don't have to call HMRC to set it up.
The online self-serve ‘Time to Pay’ service already existed for paying tax liabilities up to £10,000. Now the threshold has been increased to £30,000 in order to ease the financial burden that has arisen for so many people from the COVID-19 pandemic.
If you're in self assessment then you can pay the following in 12 monthly instalments:
To do this you will need to complete your tax return for the 2019/20 tax year to understand how much you owe HMRC. Then, you will be provided with the option of how you want to fulfil you tax liabilities. Either you'll pay the usual lump sum or, spread the cost over 12 monthly instalments.
If financially this isn't feasible for you and you need longer than 12 months then you should contact HMRC to discuss alternative payment plans.
To set up your self serve Time to Pay arrangements you need to have:
There is a catch in that defering payment beyond January 2021 means HMRC will apply interest at 2.6% on the amount you owe.
Further information is available on the GOV.UK website.
The content of this post was created on 13/10/2020.
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