One of the most common questions people have is about the timeframe they’re given to settle their tax liabilities.
This article will provide a comprehensive overview of payment deadlines and options available to you.
How Long Do I Have to Pay Self-Assessment Tax?
Self-Assessment tax returns are typically due on 31 January following the end of the tax year (5 April to 5 April).
However, the payment deadlines differ:
- First payment on account: Due on 31 January following the end of the tax year.
- Second payment on account: Due on 31 July following the end of the tax year.
- Balancing payment: Due on 31 January of the following tax year.
If you owe a tax balance after making your payments on account, you’ll need to pay this balancing payment by 31 January.
You should note that interest will accrue on any outstanding tax from the due date.
What Happens if I Can’t Pay My Taxes on Time?
If you find yourself unable to meet your tax obligations, don’t panic. HMRC understands that financial difficulties can arise.
You can request a Time to Pay (TTP) arrangement, which allows you to spread payments over an agreed period.
How Long Does a Time to Pay Arrangement Last?
The duration of a Time to Pay arrangement depends on your specific circumstances.
While HMRC typically offers up to 12 months, longer periods might be possible in exceptional cases.
Factors considered include the amount owed, your ability to repay, and your overall financial situation.
Can I Negotiate a Longer Time to Pay?
Yes, you can negotiate a longer Time to Pay arrangement.
However, it’s important to provide HMRC with a realistic and detailed financial plan demonstrating your ability to repay the debt within the proposed timeframe.
Be prepared to provide supporting documentation such as bank statements and profit and loss accounts.
What if I Don’t Pay My Taxes?
Failing to pay your taxes on time can lead to serious consequences.
HMRC may impose penalties, interest charges, and could take further enforcement action, such as issuing a payment notice or instructing bailiffs to collect the debt.
How Long Does HMRC Have to Collect Tax Debt?
HMRC generally has six years to collect unpaid tax. However, this timeframe can be extended under certain circumstances.
It’s crucial to address any tax debt promptly to avoid escalating issues.
What is a Payment Plan with HMRC?
A payment plan with HMRC is similar to a Time to Pay arrangement. It allows you to spread the cost of your tax debt over an agreed period.
The terms of the payment plan will depend on your financial situation.
Can I Set Up a Payment Plan Myself?
You can contact HMRC directly to discuss setting up a payment plan.
However, seeking professional advice from a tax advisor can be beneficial, as they can help you navigate the process and negotiate the best possible terms.
What if I Miss a Payment on a Payment Plan?
Missing a payment on a payment plan can have consequences. HMRC may review your arrangement and potentially demand accelerated repayments.
You must communicate with HMRC promptly if you anticipate difficulties in meeting a payment.