It’s tax return season again. To ease the Covid-19 economic burden, HMRC has announced a higher payment plan threshold. Find out if you qualify.
For customers feeling the widespread financial squeeze caused by the Coronavirus pandemic, help is available for paying tax liabilities provided they meet certain criteria. HMRC announced revisions to its Time To Pay scheme, with an increase in the threshold to £30,000 for Self Assessment customers. The new arrangements have applied since 1 October.
Under the updated system, individuals with Self Assessment liabilities of up to £30,000 can apply online for additional support to help spread the cost of their tax bill into monthly payments without the need to call HMRC. The payment will be taken via monthly direct debit.
Previously, the threshold for making this arrangement online was £10,000.
What are the criteria?
The following requirements must be met to benefit from the new scheme:
individuals must have no:
outstanding tax returns
other tax debts
other HMRC payment plans set up
the debt must be between £32 and £30,000
the payment plan must be set up no later than 60 days after the payment due date
The deadline to complete Self Assessment tax returns for 2019/20 is 31 January 2021. This is also the payment deadline for the 2019/20 UK tax return liability. HMRC estimates around 95% of Self Assessment customers who are due to make payments in January 2021 could qualify to implement a Time To Pay arrangement using the self-serve facility online, without needing to speak to an HMRC adviser.
What if my bill is higher than £30,000?
Individuals who have tax return liabilities of over £30,000, or need longer than 12 months to settle their tax liabilities should contact HMRC Self Assessment Payment Helpline on 0300 200 3822.
Interest will be applied to any outstanding balance from 1 February 2021. Currently, HMRC’s late payment interest rate is 2.60% annually.