Understanding Self Assessment and your tax return

Contact HM Revenue and Customs (HMRC) as soon as possible if you:

• have missed a tax deadline
• know you will not be able to pay a tax bill on time

If you can pay your tax bill

If you are able to pay your tax bill in full, you should do so as soon as possible. This will stop more penalty charges and interest being added to your tax bill.

If you cannot pay your tax bill in full

Contact HMRC to discuss support available.

HMRC may suggest you pay what you owe in instalments. This is called a Time to Pay arrangement.

Pay what you owe in instalments (Time to Pay)

How you contact HM Revenue and Customs (HMRC) to make a Time to Pay arrangement depends on what your tax bill is for.

If you cannot pay a Self Assessment tax bill

You can make your own Time to Pay arrangement using your Government Gateway account, if you:

• have filed your latest tax return
• owe less than £30,000
• are within 60 days of the payment deadline
• plan to pay your debt off within the next 12 months or less

If you cannot make your own Time to Pay arrangement online

Call the Self Assessment helpline if you cannot make your own Time to Pay Arrangement online, for example you owe more than £30,000 or need longer to pay.

Self Assessment Payment Helpline
Telephone: 0300 200 3822
Monday to Friday, 8am to 6pm (excluding public holidays)

Find out about call charges.

If you cannot pay another type of tax

If you or your company has got a letter or a text message about unpaid tax, then use the contact details in it to ask about a Time to Pay arrangement.

If you’ve not had any contact from HMRC then call the Payment Support Service.

Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 6pm (excluding public holidays)

Find out about call charges

What you’ll need to make a Time to Pay arrangement

When you set up a Time to Pay arrangement you’ll need:

• the relevant reference number for the tax you cannot pay, such as your unique tax reference number
• your VAT registration number if you’re a business
• your bank account details
• details of any previous payments you’ve missed

HMRC will ask you:

• how much you can repay each month
• if you can pay in full
• if there are other taxes you need to pay
• how much money you earn
• what you usually spend (including bills and entertainment) each month
• what savings or investments you have

If you have savings or assets, HMRC will expect you to use these to reduce your debt as much as possible.

If you’ve received independent debt advice, for example from Citizens Advice, you may have a ‘Standard Financial Statement’. HMRC will accept this as evidence of what you earn and spend each month.

If your company is in tax debt

HMRC will discuss your company’s finances with you.

They’ll ask you to make a verbal proposal, explaining how you’ll pay your tax bill as quickly as you can. An adviser will ask questions about your proposal to make sure it is realistic and affordable for you.

You must reduce your debt as much as possible before entering into a Time to Pay arrangement. You can do this by releasing assets like stock, vehicles and shares.

HMRC may ask company directors to:

• put personal funds into the business
• accept lending
• extend credit

How HMRC works out your payments

The amount you’ll be asked to pay each month is based on the money you have left after you pay any rent, food or utility bills and fixed outgoings you have, like subscriptions.

You’ll usually be asked to pay around half of what you have left over each month towards the tax you owe.

You can also agree to pay more if you want. Paying your debt quicker means you’ll pay less in total, as interest is added to your bill each month.

How long your Time to Pay arrangement lasts

There is no time limit on how long a Time to Pay arrangement can last. How long yours will last depends on how much you owe and what you can afford to pay each month.

Contact HMRC if anything changes that you think affects your Time to Pay arrangement. The arrangement can be made longer or shorter.

If HMRC finds out that something has changed in your circumstances, they may contact you to discuss changing your repayments.

When you cannot pay in instalments

You cannot set up a Time to Pay arrangement if HMRC do not believe you will follow a repayment plan. For example, if you have not paid taxes in the past.

If HMRC cannot agree a payment plan with you, they’ll ask you to pay the amount you owe in full. They can collect unpaid tax directly if you refuse to pay.

After a Time to Pay arrangement has been agreed

If you miss a payment, HMRC will contact you to find out why. Where possible, HMRC will restore the payment arrangement or renegotiate it with you.

If you cannot pay another tax bill, contact HMRC. You may be able to include the new tax bill in your existing Time to Pay arrangement.

If you do not contact HMRC or refuse to pay

HM Revenue and Customs (HMRC) will always try to contact you if you miss a tax payment. This can include sending you letters, texts and visiting you at home or at work.

If you do not get in contact with HMRC or cannot agree an instalment plan then HMRC may:

• ask a debt collection agency to collect the money
• collect what you owe directly from your wages or any monthly pension payments you get
• take things you own and sell them (if you live in England, Wales or Northern Ireland)
• take money directly from your bank account or building society savings (if you live in England, Wales or Northern Ireland)
• take you to court
• make you bankrupt
• close down your company if the tax is a business tax

Any costs, like auction fees, are normally added to your debt. HMRC will tell you before taking any of these actions and will explain your rights, costs and options.

Read more about actions HMRC can take to recover tax.

Help and advice

If you’re in Northern Ireland, you can get free debt advice from Advice NI.

Making a complaint

You cannot appeal against HM Revenue and Customs’ (HMRC) decision, but you can make a complaint if you’re unhappy about how you were treated.