Tax “Payment Plans” are ENDING – Act NOW if you Owe Tax!

Are you late paying your tax? Do you owe unpaid tax for the last financial year, or earlier? Are you struggling to pay it?

Taxfile has recently been helping some of our customers with tax debts from 2019/20 and earlier. In particular, we’re helping them to arrange payment plans with HMRC as part of their ‘Time to Pay‘ scheme. This spreads the cost of those tax debts instead of paying them off in one go. This is really useful to those who are struggling financially following the pandemic. The new payment plans are only available until 1 April 2021, though, so really you should apply by 31 March 2021. Our advice is to act now if you are in a position to take advantage of the payment plans while they’re still — just about — available.

The benefits of arranging a tax payment plan now

Agreeing a payment plan with HMRC will help avoid the 5% late payment penalty that’s usually charged on outstanding tax not paid by the deadline. And, of course, spreading the cost helps those who might otherwise struggle to get together the full amount in one transaction. The HMRC interest rate seems relatively low too.

How Tax Payment Plans have gone so far

What we’ve found so far is that some HMRC agents on the Payment Plan Helpline are being very helpful indeed. It varies, but in some instances, we’ve seen them agree payment terms up to 48 months — that’s four years in which to pay a tax debt!

Tax Payment Plans seem to be flexible

We’ve tried a variety of approaches, agreeing stepped amounts with HMRC in one example, i.e. starting with a manageable amount initially and then that will increase as economic prospects improve over time, particularly as things hopefully get back to normal once the UK vaccine roll-out is complete.

We’re also finding that people will be able to pay off lump sums when they’re back on their feet financially, thereby reducing the outstanding balance and/or the level of ongoing payments.

You Have Less Than 24 Hours!

At time of writing, the final deadline for Tax Payment Plan applications is almost over – the scheme is about to expire. Callers to the HMRC Time To Pay Helpline will also need to have done their last tax return before the end of the month, otherwise they are not eligible. Call the HMRC helpline by 6pm latest to apply by phone. If applying online, you have until midnight to apply if you set up a login in time. You will need a passport or other I.D.

Taxfile can help!

Taxfile can help in several ways if people are struggling to get cooperation from HMRC.

• We can help finalise and submit your tax return, so you are then eligible to apply for the tax debt Payment Plan;
• If you’re then still struggling to get a Payment Plan agreed with HMRC, we can help deal with them on your behalf and negotiate payment terms for you, so you get the best outcome.

Learn more on the Government site here or contact Taxfile using one of the yellow buttons below for our help on any tax- or accounting-related matter: