One week left to set up Self Assessment payment plans

Last month, HMRC said that due to the impact of the COVID-19 pandemic, they were giving Self Assessment taxpayers more time to pay their tax or set up a payment plan without facing a 5 per cent late payment penalty charge, as long as arrangements were in place by midnight on 1 April.

So far, almost 117,000 taxpayers have set up a self-serve Time to Pay arrangement online, totalling more than £437 million.

HMRC said there is no change to the payment deadline and other obligations are not affected, meaning that the payment deadline remains 31 January 2021 and interest will be charged on late payment. The current rate of late payment interest is 2.6 per cent.

Further, a 5 per cent late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2021.

Further late payment penalties are charged at six and 12 months (August 2021 and February 2022, respectively), on tax outstanding where a payment plan has not been set up.

Individuals who have yet to settle their liabilities for the 2019 to 2020 financial year can pay their tax bill or set up a monthly payment plan online at GOV.UK.

In addition, they can pay online, via their bank, or by post. Alternatively, setting up a Time to Pay arrangement allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

Anyone worried about paying their tax and unable to set up a payment plan online can also contact HMRC for help and support on 0300 200 3822.