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Paying your taxes after they are due is accessible by setting up an EXTRA TIME TO PAY HMRC arrangement for your next self-assessment, VAT or PAYE tax payment.
To support individuals and businesses struggling to pay their next self-assessment, PAYE or VAT taxes, HMRC is encouraging the use of its online tool to set up an instalment plan for these tax payments.The tool can deal with payments due for up to:
- £30,000 for self assesment (your tax return payments in January and July.
- £50,000 for employers PAYE (your business payroll taxes)
- £50,000 for VAT
A self serve process means that provided you meet all the relevant criteria, a short term extra time to pay HMRC arrangement can be put in place without discussing it with HMRC and without giving details of current income and expenditure.
Accountants acting as agents cannot set up the required direct debit in their customers’ names. Only you can arrange for extra time to pay HMRC. You have 60 days before or after a payment deadline to set up extra time to pay HMRC.
How do I apply for extra time to pay HMRC for my Self Assessment online?
- If you have a personal tax account (register for a personal tax account) and your tax return is filed with HMRC, apply online to set up a self-assessment payment plan to set up a direct debit and pay any tax that is owed over up to 12 months
- It would be best if you waited three full days after your tax return has been filed to set up an online extra time to pay the HMRC arrangement
- The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and over what period
You need to meet the following requirements to set up your self assessment extra time to pay HMRC arrangement:
- Have no:
- other HMRC payment plans set up
- other tax debts
- outstanding tax returns
- The total debt needs to be under £30,000 and can include any tax, duty, penalties or surcharges that you cannot afford to pay
- The payment plan needs to be set up:
- No later than 60 days after the due date of debt, this will be the 1st of April for a 31st January payment date or the 29th of September for a 31st July payment date
- No earlier than 60 days before the due date of debt; this will be the 3rd of December for a 31st January payment date or the 2nd of June for a 31st July payment date.
How do I apply for extra time to pay HMRC for my Self Assessment if I can’t contact them online?
- If you need longer than 12 months or your total tax debt is over £30,000, you must call HMRC.
- You can arrange extra time to pay HMRC by calling the Self Assessment Payment Helpline at 0300 200 3820.
- It’s open Monday to Friday from 8 am to 6 pm. It is closed on bank holidays and weekends.
- You will find that calling first thing in the morning has shorter waiting times.
- Lines will always be super busy around the payment deadlines.
- Remember that you can set an extra time to pay HMRC payment within 60 days after a payment deadline.
- Do not get too stressed if you do not have a plan before your payment is due.
How do I apply for extra time to pay HMRC my PAYE online?
- If you have an employer’s tax account (register for a PAYE account) and your tax return is filed with HMRC, you can apply online using HMRC PAYE set up time to pay to set up a direct debit and pay any tax owed over 12 months.
- The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and over what period
You need to meet the following requirements to set up your PAYE extra time to pay HMRC arrangement:
- You must have passed the due date for making your PAYE payment on the 22nd of the month.
- The total debt must be under £50,000 and can include any tax, duty, penalties or surcharges you cannot afford.
- Have debts that are five years old or less
- Do not have any other payment plans or debts with HMRC
- Have sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due
How do I apply for extra time to pay HMRC my PAYE if I can’t contact them online?
If you have passed your payment deadline, telephone 0300 200 3810. Their phone line opening hours are Monday to Friday, 8 am to 6 pm and closed weekends and bank holidays.
The phone lines get busy around payment deadlines. Their phone lines are usually less busy first thing in the morning.
How do I apply for extra time to pay HMRC my VAT online?
- If you have a VAT tax account (register for a VAT account) and your VAT return is filed with HMRC, you can apply online using HMRC VAT set up time to pay to set up a direct debit and pay any tax owed over 12 months.
- The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and over what period
You need to meet the following requirements to set up your VAT extra time to pay HMRC arrangement:
- have missed the deadline to pay a VAT bill on the 7th of the month it was due
- owe £50,000 or less and can include any tax, duty, penalties or surcharges you cannot afford.
- plan to pay your debt off within the next 12 months
- have a debt for an accounting period that started in 2023 or later
- do not have any other payment plans or debts with HMRC
- have filed all your tax returns
You cannot set up a VAT payment plan online if you’re in the Cash Accounting Scheme or Annual Accounting Scheme or if you make payments on account.
How do I apply for extra time to pay HMRC my VAT if I can’t contact them online?
If you have passed your payment deadline, telephone 0300 200 3831. Their phone line opening hours are Monday to Friday, 8 am to 6 pm and closed weekends and bank holidays.
The phone lines get busy around payment deadlines. Their phone lines are usually less busy first thing in the morning.
How do I apply online for extra time to pay HMRC my Corporation Tax?
There are no online systems for arranging extra time to pay HMRC your Corporation Tax.
HMRC directs you towards their digital assistant to get help if you’re having problems paying what you owe.
If the digital assistant cannot help you, you can ask to transfer to a web chat with an HMRC adviser if they’re available.
There isn’t a specific payment problem. The telephone number to call their general enquiries telephone is 0300 200 3410. Their phone line opening hours are Monday to Friday, 8 am to 6 pm and closed weekends and bank holidays.
What information do I need when I call for the extra time to pay HMRC arrangement?
- a cuppa and to be prepared for an hour-long wait on hold
- during the call, quote your 10-digit unique taxpayer reference (UTR) or National Insurance number.
- your bank details to make the payment and set up a direct debit
- details of the tax you can’t afford to pay
- why you’re not able to pay, and what your current financial circumstances are
- what you have done to try to pay your bill on time and in full
- about your current financial position (including income and expenditure, savings, investments and other assets)
- how you expect your finances to change in future
How does HMRC work out what I need to pay them?
HMRC will decide your ability to pay using an ‘income and expenditure assessment’ form. This looks at your income, disposable assets and expenditures to help them work out your disposable income.
HMRC expects you to pay no more than 50% of your disposable income. This may be higher if you have a very high disposable income. There’s no upper limit on how much time someone can have to pay.
HMRC will ask you for:
- your marital status and if you have any dependents
- your employment details (including your VAT registration number if you’re VAT-registered and your employer’s PAYE reference number if you’re an employee)
- property you own or rent and the cost of your mortgage or rent
- details of your household’s average monthly income (including any rental income and any benefits you receive)
- details of any assets you hold (such as the value of all of your property, if you own any motor vehicles and how much you paid for them and when)
- information about any savings and investments you have (including saving certificates, Premium Bonds, Individual Savings Accounts and stocks and shares)
- how much you spend each month on household bills (including gas, electricity, water and Council Tax payments) and commuting, petrol, food, clothing and any television packages you might have
- details of any other debt you have (including loans, hire purchases and credit cards)
- information about any creditors you may owe money to (including debt that’s outstanding to them and the payments you make)
- do you plan to pay off your tax debt
Will HMRC ask me to sell assets or use my savings to pay them?
If you have assets that can be realised to pay HMRC by you (for example, savings, shares, or a second home (including equity within a property), HMRC expect you to use these to pay your taxes before giving you time to pay.
Will HMRC ask me to sell my home to pay my tax debt?
HMRC will not expect you to sell your family home, but they may take charge to secure the debt.
Will HMRC expect me to access my pension early to pay my tax debts?
HMRC will not ask you to access your pension early to pay your tax debts. If you are paid a pension, this will be considered part of your income and expenditure assessment.
Is interest charged interest on time to pay HMRC arrangments?
Interest accrues from the due date on time to pay arrangements for all tax outstanding at the HMRC late payment interest rate until cleared.
Do late payment penalties apply to extra time to pay HMRC arrangments?
After 30 days (3 March), an automatic 5% late payment penalty is due on any unpaid tax balance. The 5% penalty applies again to any outstanding tax balance after six months (31 July) and 12 months (31 January).
Penalties are suspended if you have a payment arrangement in place before the dates the penalties are applied. However, breaking your time to pay agreement will make you liable for the penalties.
Be nice
Taking action may be stressful when contacting HMRC, but remember to be honest and prepared to explain why you need the extra time. They are there to help you pay your taxes. Contacting them is better than making no contact at all. Usually, I find the nicer I am to them, the more willing they are to help.