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With the holidays and the end of the year fast approaching, now is an excellent time to start planning your finances for the new year. For those who file Self Assessment tax returns, the thought of making a significant tax payment at the end of January 2025 may be causing some concern.
Did you know that HM Revenue & Customs (HMRC) offers an option to spread the cost of your tax bill through their Time to Pay system?
What is Time to Pay?
Time to Pay is an HMRC service that allows taxpayers to spread the cost of their Self Assessment tax bill through manageable monthly payments. It’s specifically designed for those who are unable to pay their bill in full by the deadline. By using Time to Pay, you can avoid further late payment penalties, as long as you stick to the agreed payment plan.
Key points to know:
- Eligibility: If your tax bill is less than £30,000, you can set up a payment plan online without needing to contact HMRC. If you owe more than £30,000, you will need to contact HMRC directly to discuss your options.
- Deadline: The tax return and payment deadline for the 2023 to 2024 tax year is 31 January 2025. Before setting up a Time to Pay arrangement, you must first file your tax return.
- Payment Terms: You can spread your payments over a maximum of 12 months, making it easier to manage your budget. However, it’s crucial to keep up with the monthly payments, as missed payments can result in interest and penalties.
HMRC has reported that over 15,000 taxpayers have already set up Time to Pay plans for the 2023 to 2024 tax year.
Planning ahead and exploring your options can make the process of filing your tax return much less stressful. If you’re concerned about how to pay your tax bill, Time to Pay could be a practical solution worth considering.
If you need assistance with filing your Self Assessment or arranging a payment plan with HMRC, please don’t hesitate to get in touch – we’re here to help!
