Easing Tax Burden with Payment Plans
HMRC’s Flexible Solution for Taxpayers
As the Self-assessment tax return deadline swiftly approaches, HMRC is keenly highlighting the increasing number of people opting for payment plans to manage their tax bills. Remarkably, and quite encouragingly, about 44,800 individuals have already seized the opportunity to spread the cost of their tax liabilities, demonstrating a proactive approach in navigating their financial responsibilities.
Understanding Time to Pay
The Time to Pay service offers a lifeline for those unable to settle their tax bill in full. This service, accessible online, allows taxpayers to establish a monthly payment plan. Notably, those owing less than £30,000 can check their eligibility and set up a plan using the affordability checker on GOV.UK. However, it’s crucial to act promptly, as interest accrues on outstanding balances starting 1 February.
HMRC’s Director General on Payment Options
Myrtle Lloyd, HMRC’s Director General for Customer Services, encourages taxpayers to explore suitable payment options. The HMRC app and online banking offer various payment methods, all detailed on the GOV.UK website under ‘pay your Self Assessment tax bill’.
Digital Payments on the Rise
In December 2023 alone, nearly 28,794 customers utilized the HMRC app to pay over £42 million in taxes. The app also facilitates tax refunds, emphasizing the importance of including bank details in tax filings for prompt and secure transactions.
Deadlines and Payment on Account
For those making a Payment on Account for the upcoming tax year, the first installment is also due by 31 January. Comprehensive information on payment methods is available on GOV.UK, along with a helpful YouTube video explaining self-assessment tax bills and payment options.
Penalties for Late Submission
HMRC understands that some may face difficulties meeting the deadline and considers reasonable excuses to waive penalties. However, late submissions can incur significant penalties, starting with an initial £100 fixed penalty and escalating to additional charges and interest on unpaid taxes.
Protecting Against Scams
Taxpayers are advised to stay vigilant against scams and to never share HMRC login details, even with tax agents. Official HMRC scam advice can be found on GOV.UK.
Additional Support and Resources
HMRC is committed to assisting taxpayers through various channels, including a dedicated helpline for Self Assessment queries, digital assistants, online guidance, webinars, the HMRC app, and social media updates. Moreover, for any changes in circumstances, such as changes in employment status or personal details, HMRC encourages prompt updates through the app or online services.
In Conclusion
HMRC’s Time to Pay arrangement is a significant aid for taxpayers, especially as the deadline looms. It not only offers a flexible approach to managing tax liabilities but also underscores HMRC’s commitment to supporting taxpayers through various digital and direct channels.
Sources: THX News & HM Revenue & Customs.