Self assessment ‘time to pay’ threshold raised to £30,000
12th January 2021
HMRC has made it easier for self assessment taxpayers to pay the tax they owe incrementally on a monthly basis, by extending the threshold for ‘time to pay’ applications, as part of efforts to ease financial stresses cause by the pandemic.
From 1 October, the limit for time to pay, the online payment plan service used to set up instalment arrangements for paying tax liabilities, has been increased to £30,000, up from £10,000, and this has been introduced to support businesses and individuals through the uncertain months ahead.
It was announced that self assessment taxpayers could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019/20 and their first payment on account bill for 2020/21 in monthly instalments, rather than as two payments in January 2021 and July 2021.
When their tax return for the 2019/20 tax year has been submitted to HMRC, taxpayers who have payments to make have the option of using the online self-serve time to pay facility to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.
HMRC estimates around 95% of self assessment taxpayers who are due to make payments on 31 January 2021 could qualify to implement a time to pay arrangement using the online facility, without needing to speak to an HMRC adviser.
Those wishing to do so must meet a set of requirements.
These are that they have no outstanding tax returns, no other tax debts, and other HMRC payment plans set up. The tax owing needs to be between £32 and £30,000, and the payment plan needs to be set up no later than 60 days after the due date of a debt. However we recommend that any time to pay arrangement is set up before 31 January 2021.
Taxpayers using time to pay arrangements will be required to pay any interest on the tax owed, and interest will be applied to any outstanding balance from 1 February 2021 to the date of payment.
Those with self assessment tax payments over £30,000, or who need longer than 12 months to pay in full, may still be able to set up a time to pay arrangement by calling the self assessment payment helpline on 0300 200 3822.
The link to the online self-serve time to pay facility is