HMRC increases the threshold for Self-Assessment online payment plan

HM Revenue & Customs (HMRC) has increased the threshold for Self-Assessment taxpayers to use its online self-service Time to Pay payment plan service from £10,000 in tax liabilities to £30,000. This has been put into place to help individuals who have been affected by the coronavirus pandemic.

Once they have completed their 2019-20 tax return and know how much tax they owe, customers can use the self-serve facility to set up monthly direct debits and spread the cost of their tax bill and won’t need to call HMRC.

The monthly instalments can cover tax payments deferred from July 2020 as well as outstanding tax owed for 2019-20 and the first payment on account for the current tax year

According to the latest figures from HMRC almost 25,000 Self Assessment customers have already set up an online payment plan to manage their tax liabilities in this way. The deadline for taxpayers to set up the payment plan is no later than 60 days after the due date of the tax debt – so for tax payments due on 31 January 2021, this is 1 April 2021.

However, setting up a payment plan more than 30 days after the due date of the tax debt will lead to late payment penalties. This means payment plans for tax due on 31 January 2021 would need to be set up by 2 March 2021.

To qualify for a payment plan using the online self-service Time-to-Pay system, taxpayers must:


Have no outstanding tax returns;

Have no other tax debts;

Have no other HMRC payment plans set up; and

Have a debt of between £32 and £30,000.

Those with Self-Assessment debts of more than £30,000 or who need more than 12 months to pay the tax they owe may be able to set up a Time to Pay arrangement via the Self-Assessment Payment Helpline on 0300 200 3822.

HMRC also asks customers to be aware of copycat HMRC websites and phishing scams. Customers should always type in the full online address to get the correct link for their Self Assessment tax return online securely and free of charge. They also need to be alert if someone calls, emails or texts claiming to be from HMRC, saying that they can claim financial help, are due a tax refund or owe tax as it might be a scam.

Isobel Brett, Director of Bretts Business Recovery, commented “This past year has been tough for many businesses and self-employed people – the enhanced self-service Time to Pay service helps spread the cost of your tax bill into monthly payments and means you can start the year knowing you have your tax liabilities under control”

Contacting Bretts Business Recovery (BBR), your accountant or other professional advisers will help you to plan ahead and manage your finances efficiently.

If you have other debt that you are having difficulty managing presently it may be that an Individual Voluntary Arrangement would help.  To talk to one of our advisors, in confidence and without obligation,  please contact us.