Paying your taxes after the due date is possible by setting up an “Extra Time to Pay HMRC” arrangement for your next Self Assessment, Corporation Tax, VAT, or PAYE tax payment. HMRC supports individuals and businesses struggling to meet their tax obligations by encouraging the use of its online tool to set up an instalment plan. Here’s how you can do it:
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Essential Planning Points for Time to Pay HMRC
- You have 60 days before or after the payment deadline to set up an instalment plan.
- Interest charges will apply, and late payment penalties may also apply.
- Only you can set up the direct debit; accountants cannot do this on your behalf.
Self-Assessment Time to Pay HMRC
Online Application for Extra Time to Pay HMRC for Self-Assessment
If you have a personal tax account and your tax return is filed with HMRC, you can apply online to set up a Self-assessment payment plan. Here’s how:
- Wait three days after filing your tax return to set up the plan.
- The online tool will ask if you want to make a lump sum payment upfront, the amount of your desired instalments, and the payment period.
- Ensure you meet the following requirements:
- No other HMRC payment plans are set up.
- No other tax debts.
- No outstanding tax returns.
- Total debt under £30,000, including any tax, duty, penalties, or surcharges you cannot afford to pay.
- Set up the payment plan no later than 60 days after the debt’s due date.
Phone Application for Extra Time to Pay HMRC for Self-Assessment
- If you need over 12 months to pay or owe over £30,000, call the Self Assessment Payment Helpline at 0300 200 3820 (Monday to Friday, 8 am to 6 pm).
PAYE Time to Pay HMRC
Online Application for Extra Time to Pay HMRC for PAYE
If you have an employer’s tax account and your latest real-time information return is filed with HMRC, you can apply online using HMRC’s PAYE setup tool. Here’s how:
- Ensure you have passed the due date for making your PAYE payment.
- The total debt must be under £100,000 and can include any tax, duty, penalties, or surcharges you cannot afford.
- Have debts that are five years old or less.
- No other payment plans or debts with HMRC.
- Have sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due.
Phone Application for Extra Time to Pay HMRC for PAYE
- If you can’t use the online tool, call HMRC to arrange extra time to pay. Call the PAYE Payment Helpline at 0300 200 3810 (Monday to Friday, 8 am to 6 pm).
VAT Time to Pay HMRC
Online Application for Extra Time to Pay HMRC for VAT
If you have a VAT tax account and your VAT return is filed with HMRC, you can apply online using HMRC’s VAT setup tool. Here’s how:
- Ensure you have missed the deadline to pay a VAT bill.
- The total debt must be under £100,000 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.
- No other payment plans or debts with HMRC.
- Have filed all your tax returns.
Phone Application for Extra Time to Pay HMRC for VAT
- If you can’t use the online tool, call HMRC to arrange extra time to pay. Call the VAT Payment Helpline at 0300 200 3831 (Monday to Friday, 8 am to 6 pm).
Corporation Tax Time to Pay HMRC
Online Application for Extra Time to Pay HMRC for Corporation Tax
There are no online systems for arranging extra time to pay HMRC your Corporation Tax. HMRC directs you towards their digital assistant for help. If the digital assistant cannot help, you can transfer to a web chat with an HMRC adviser if available.
Phone Application for Extra Time to Pay HMRC for Corporation Tax
- If you can’t use the web chat, call HMRC to arrange extra time to pay. Call the Corporation Tax Payment Helpline at 0300 200 3840 (Monday to Friday, 8 am to 6 pm).
FAQs for Time to Pay HMRC
What information do I need when I call for the extra time to pay the 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 have you done to try to pay your bill on time and in full?
- Information about your current financial position (including income and expenditure, savings, investments, and other assets).
- How do you expect your finances to change in the 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 form looks at your income, disposable assets, and expenditures to help them calculate your 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 benefits you receive).
- Details of any assets you hold (such as the value of your property, if you own any motor vehicles, how much you paid for them, and when).
- Information about your savings and investments (including saving certificates, Premium Bonds, Individual Savings Accounts, and stocks and shares).
- How much do you spend monthly 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 outstanding debt and the payments you make).
- Your 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 realized to pay HMRC (for example, savings, shares, or a second home, including equity within a property), HMRC expects 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 on time to pay HMRC arrangements?
Interest accrues from the due date on time to pay arrangements for all tax outstanding at the HMRC late payment interest rate until cleared.
As announced in the Autumn Budget, the HMRC interest charged on unpaid tax liabilities will increase by 1.5 percentage points to the Bank Rate plus four percentage points. Late payment interest is charged at the Bank Rate plus 2.5 percentage points. This measure will be effective from 6 April 2025.
Do late payment penalties apply to extra time to pay HMRC arrangements?
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.
Note: HMRC may mistakenly send out penalties even when a Time to Pay (TTP) arrangement is in place. If this happens, you should appeal the penalties. In our experience, they are usually revoked on appeal. Remember, you only have 30 days to appeal.
Final Tip to get extra time to pay HMRC
Taking action may be stressful, but remember to be honest and prepared to explain why you need extra time. HMRC is there to help you pay your taxes, and contacting them is better than making no contact. Usually, I find the nicer I am to them, the more willing they are to help. Being polite and cooperative can also make the process smoother.