The Chancellor has announced a time to pay service for individuals who need to spread the cost of their upcoming tax bill due in January 2021.
Individuals with self assessment tax liabilities between £32.00 and £30,000 will be able to apply to spread their bill over a period of up to 12 months. They will be asked to set up a monthly direct debit and pay any tax due in monthly instalments. HMRC have confirmed that once your 2019/20 self assessment tax return has been submitted, you will be able to apply online to use this service.
The following requirements will need to be met in order to be eligible to apply:
- You must have no outstanding tax returns
- No other payment plans already set up with HMRC
- No other tax debts
- The tax liability must not be more than 60 days overdue
Interest will be charged on any tax balances outstanding from 1 February 2021, at the current rate of 2.60%.
If your tax bill is greater than £30,000, you may be able to arrange a payment plan with HMRC which will need to be done via a phone call. Please get in touch with us to discuss this further.