Elaine Shiels

Written by: Elaine Shiels

Elaine Shiels


Time-to-pay arrangements now online

In a race to avoid a £100 late filing penalty, over 700,000 taxpayers filed their tax returns on Friday 31 January. Indeed, 26,562 of those left it until after 11pm! Filing at the last-minute gives people less time to manage their tax bills, particularly where tax charges crop up for the first time such as the high-income child benefit charge or the tapering provisions for the pensions annual allowance. 

Anybody who is struggling to pay a debt to HMRC can ask to spread the costs using a payment plan. In the past, affected individuals had to call HMRC and negotiate with call-centre staff. However, a payment plan for self-assessment liabilities can now be set up online providing the individual owes £10,000 or less, has no other tax debts and no other HMRC payment plans set up. 

If a payment plan is agreed with HMRC then late payment penalties will not be charged from the time that the agreement is in place, provided the taxpayer sticks to the agreement. Interest will still be charged on any payment made after the deadline at a rate of 3.25 per cent per annum, so taxpayers should only use a time-to-pay arrangement when they really need it.

This is a welcome addition to HMRC’s online services, allowing taxpayers more flexibility in how and when they set up payment plans to help them when they need it most. 

It is worth noting that HMRC have set up a specific phone number for those people unable to pay their tax bill due to the coronavirus.

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