With the festive period now in full swing and many household budgets under strain, it may be reassuring to know that there are options available if paying your tax bill in one lump sum feels challenging.

While the deadline for submitting your tax return and settling any tax due is not until 31 January 2026, taking action early can make the process much more manageable — particularly if you anticipate needing extra time to pay.

HM Revenue & Customs (HMRC) offers a Time to Pay service that allows Self-Assessment taxpayers to arrange a monthly instalment plan once their tax return has been submitted.

Since 6 April 2025, almost 18,000 people have already set up a payment plan, using this flexibility to manage their tax liabilities without incurring late-payment penalties.

Key points to keep in mind include:

  • If you owe £30,000 or less, you can set up a payment plan online without needing to contact HMRC.

  • Your tax return must be filed before you can apply for Time to Pay.

  • The amount you pay each month is based on your individual financial circumstances.

  • Interest will still be charged on any outstanding balance, so paying as quickly as possible remains beneficial.

If required, HMRC’s Time to Pay service can provide some valuable breathing space.

If you are unsure how this option might apply to your situation, would like help planning for your January tax bill, or want to understand how a Time to Pay arrangement could work in practice, please feel free to get in touch. We can help you review your position early, giving you time to make informed decisions for your business.

See: https://www.gov.uk/government/news/hmrc-offers-time-to-help-pay-your-tax-bill