Tax Payment Plans - HMRC Tax Advice

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Tax Payment Plans

Making tax payments can be difficult to keep track of.

All those who have made a self assessment for their tax contributions will be fully aware of how difficult and complicated it can be to budget for once or twice yearly tax payments.

Since January 2009, HMRC have had a fully operational central database which can identify slow or missed payments much faster than its previous system.

A payment plan may benefit you or your business if:

  • You have a tax bill that you expect to have difficulty in paying.
  • A tax debt that is increasing due to interest charges.
  • A tax bill that threatens legal action.
  • A statutory demand for full payment of outstanding tax arrears.

From April 2011, HMRC introduced a managed payment plan to support people who are struggling with making repayments in one or two annual lump sums.

This new, optional, tax payment plan method offers a means of paying tax liabilities on time, within a budget and avoids getting into arrears. This allows people and businesses to spread their income tax or corporation tax payments over equal monthly installments and to a manageable level within the payment plan. You must remember to keep up the monthly payments.

Managed Payment Plans

You may be eligible to a managed payment plan if you are:

  • An individual taxpayer making self assessment payments.
  • A company under corporation tax self assessment.

If your company is already subject to quarterly installment arrangements, it will not be eligible.

Time to Pay Programme

A Time to Pay Programme may be the tax payment plan that your business has been looking for.

Time to Pay Programmes have been organised by the government to assist businesses in the deferral of PAYE, VAT, National Insurance and Corporation tax.

If your company is 'genuinely unable to pay' its tax contribution requirements, and tax owed is on previous year's profits or a trading loss in the current year is highly probable, there's a chance that a Time to Pay Programme may be accessible.

Advice for those Seeking a Payment Plan

  • Be honest in your dealings and conversations with HMRC; your applications may become long and drawn out, so the information that you provide should be consistent.
  • Submit your PAYE/NI and VAT returns to HMRC as it will allow them to best understand your situation.
  • Make an offer of a suitable payment plan for your current and projected situation.

Keep a note of the name, telephone number, plus discussions you have with HMRC, as verbal agreements may change over time. Send a copy of your conversations to HMRC so they have a record.


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