The Self Assessment Tax Return deadline is now just over two weeks away - with those having completed disclosing their income/expenses information for the period 2019 to 2020 being offered the option to spread their tax debts into monthly amounts.
In order to help people who will find it hard to settle their tax bill this January, HMRC has provided a 'Time to Pay' payment plan facility. Easy to create online, the facility allows Self Assessment debts to be spread over 12 months for debts between £32 and £30,000. The limit was previously £10,000, but in light of the circumstances surrounding the country at the moment, this was tripled.
Other amounts and longer periods can be considered for individual circumstances by calling HMRC (0300 200 3822). There are also other caveats such as having no outstanding tax returns, no other tax debts and no existing payment plan with HMRC.
Between October 2020 and a few days ago, 25,000 people have arranged to spread their tax bills across these 12 equal instalments. Though the bill will become more manageable, HMRC will still apply interest to the outstanding amounts starting from February 1st.
A total of £69.1 million has already been put into the payment plans by around 25,000 customers - an average of about £2,821 per plan. This would equate to monthly instalments of £235 on average.
You can get an estimate of your tax return bill for 2019/2020 using one of our many tools.
If you have suffered a reduced income during this tax year, you can apply to reduce your payment on account too.