How to Arrange a Payment Plan with HMRC for Self-Assessment Taxes

For individuals registered for self-assessment, the 31st of January is a crucial deadline. This date marks several important tax-related deadlines:

1. Filing Deadline for 2022-23 Tax Returns: Avoid the £100 late filing penalty by submitting your tax returns by this date.
2. Payment Deadline for Outstanding Taxes: Ensure payment of any owed tax, National Insurance Contributions (NIC), or student loan repayments for the 2022-23 period.
3. First Payment on Account for 2023-24: This is also the due date for your initial payment for the upcoming tax year.

Facing Payment Difficulties?

If you’re unable to meet these payment obligations by the 31st of January, HMRC offers a solution: you can apply for a formal payment plan to spread the cost over time.

Step-by-Step Guide to Setting up an HMRC Payment Plan

Follow these instructions, as outlined on the GOV.uk website, to set up your payment plan:

1. Gather Necessary Information: You’ll need your unique tax reference number or other relevant reference numbers, your UK bank account details (you must be authorised to set up Direct Debits), and information on any missed payments.
2. Determine Eligibility for Online Setup:
   • For self-assessment tax debts, you can usually set up a payment plan online if:
     • Your latest tax return has been filed.
     • You owe £30,000 or less.
     • You’re within 60 days of the payment deadline.
     • You have no other payment plans or debts with HMRC.
3. Complete the Online Process: HMRC will ask for details about your income and expenditures when setting up the plan.

Setting up a payment plan with HMRC is a straightforward process that can alleviate financial stress if you’re struggling to meet your tax obligations. Remember, staying proactive and informed about your tax responsibilities is key to managing your finances effectively.