Questions and Answers
Can I spread the cost of my tax bill?
I complete a self-assessment tax return, can I spread the cost of my tax bill so I don’t have to pay it all in January?
Last updated 13 Dec 2024 | First published 13 Dec 2024
By Catherine Heinen, FCCA 1 min read
Self-Assessment Tax Returns
If you are unable to pay your self-assessment tax bill in full by 31st January 2025, or you’d like to spread the cost, using HMRC’s Time to Pay arrangement may be beneficial. You will need to file your tax return before setting up a Time to Pay arrangement.
A Time to Pay arrangement is a monthly payment plan set up with HMRC. My setting up such a plan, you will avoid late payment penalties when you are unable to pay your tax. Online payment plans can be created online, without the need to speak to HMRC where your tax bill is up to £30,000. If your tax bill is over £30,000 you will need to contact HMRC.
Any missed monthly payments will incur late payment interest and penalties.
We always recommend that taxpayers hold back at least a quarter of their income to cover their tax bill in January 2025. Preparing your self-assessment tax return early also gives you the advantage of knowing your tax bill sooner and giving you time to plan for it. There are more benefits of preparing your tax return early detailed in our article.
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Self-employed individuals, partners in business partnerships and landlords may be required to file a tax return. Those in receipt of child benefit and earning over £60,000 and those earning more than £10,000 in savings and investment income will need to complete a tax return too. For a comprehensive list check HMRC’s content on who must send a tax return.
Last updated 13 Dec 2024 | First published 13 Dec 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a qualified accountant and technical content writer with experience working at mutliple accountancy practices in the UK top 50 accountancy firms according to Accountancy Age. Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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