15th October 2020

Chancellor launches online ‘Time to Pay’ service for Self Assessment customers

HMRC have published an update after the Chancellor announced a new online tax service for Self Assessment customers in response to the economic impact of the Coronavirus crisis.

Self Assessment customers can now apply online to spread the cost of their tax bill into monthly payments, instead of having to call HMRC to arrange this. Additionally, the online ‘Time to Pay’ service is set at £30,000, which should help those whose businesses have been negatively impacted this year.

When completing their 2019-20 tax return, Self Assessment customers will now have the option of using the online self-serve ‘Time to Pay’ service to set up a monthly direct debit and spread the payment of their tax over a maximum of 12 months.

The criteria for using the ‘Time to Pay’ service is as follows:

1. Have no outstanding tax returns
2. Have no other tax debts
3. Have no other ongoing HMRC payments set up
4. It must be no more than 60 days after the tax was due for payment (essentially, the end of March 2021)
5. Your Self Assessment tax bill must be between £32.00 – £30,000.00

Don’t panic if you don’t meet the requirements outlined above – simply call HMRC to discuss setting up ‘Time to Pay’ on 0300 200 3822.

Be aware that if you do opt to spread the payment of your tax bill, interest will be applied to any outstanding balance from 1 February 2021. For more information on help paying your tax bill, visit https://www.gov.uk/difficulties-paying-hmrc

This is a welcome reprieve for businesses who are under pressure this year, but not quite as helpful as the six-month extension given to businesses who had payments due in July 2020. As always, PSF Accounting will keep you updated with any further announcements regarding financial support or tax.