Self-assessment taxpayers can now apply online to spread the cost of their tax bill into monthly payments without the need to call HMRC. The online self-serve ‘Time to Pay’ service has been increased to £30,000 for self-assessment taxpayers to help ease any potential financial burden they may be experiencing due to the COVID-19 pandemic. Enhancement of Time to Pay and deferral mechanisms for self-assessment payments were a recommendation of this Institute in its Next Financial Year paper and a lobbying matter in recent months.

Once you or your clients have completed your tax return for the 2019–20 tax year, you can use the online self-serve ‘Time to Pay’ service through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

If you wish to set up your own self-serve ‘Time to Pay’, you must meet the following requirements:

• no outstanding tax returns;
• no other tax debts;
• no other HMRC payments set up;
• your self-assessment tax bill is between £32 and £30,000; and
• it is no more than 60 days since the tax was due for payment.

If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.

If you or your clients deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. However, the VAT deferral new payment scheme can be used to further spread these payments over equal instalments up to 31 March 2022. Alternatively, you or your clients can make payments as normal by 31 March 2021, or make Time To Pay arrangements with HMRC if you need more tailored support.

More information on the VAT Deferral New Payment Scheme will be available on GOV.UK in the coming months.