TAX RETURN: More than 40,000 Self Assessment workers arrange to pay HMRC via payment plans

Image credit: HMRC

As the deadline for Self Assessment tax returns casts a shadow over self-employed workers, HM Revenue and Customs (HMRC) reports that nearly 44,800 people have proactively managed their tax liabilities.

These individuals have collectively arranged payment plans for tax bills amounting to almost £148 million, reflecting a significant level of engagement with the tax system.

Out of the millions required to file, over 7.7 million Self Assessment customers have already submitted their returns for the 2022 to 2023 tax year. However, HMRC is issuing a reminder to those who have yet to settle their tax bills to do so before the 31 January deadline to avoid potential penalties.

For taxpayers facing difficulties in paying their dues in full, HMRC offers a facility called Time to Pay. This option, available online, allows individuals owing less than £30,000 to set up a monthly payment plan. The service includes an affordability checker on GOV.UK to assist in determining a feasible payment schedule. It's important to note that interest will start accruing on any unpaid balances from 1 February.

In December 2023 alone, 28,794 customers utilised HMRC’s free and secure app to pay over £42 million in taxes. The app not only facilitates payments but also processes tax refunds. Customers are advised to provide their bank details when filing their returns to enable HMRC to issue any repayments swiftly and securely.

Those who make advance payments towards their estimated tax bill, a process known as Payment on Account, are reminded that the first instalment for the 2023 to 2024 tax year is also due by 31 January.

HMRC recognises that there may be valid reasons for missing the Self Assessment deadline and will consider individual circumstances. Taxpayers with a reasonable excuse might avoid penalties. However, it's important to be aware of the penalties for late submission, which include an initial £100 fixed penalty, escalating daily penalties after three months, and further charges at six and twelve months. Late payments also incur additional penalties and interest charges.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help Self Assessment customers meet their obligations and there is no time like the present to choose the right payment option for you. Whether you choose to pay in instalments, via the HMRC app or using online banking, search ‘pay your Self Assessment tax bill’ on GOV.UK for a full list of options.”