Managing Your Taxes with HMRC's Time to Pay Arrangement
HM Revenue & Customs (HMRC) places great importance on timely tax payments. However, if you find it challenging to pay your taxes in full, don't worry—HMRC offers a helpful solution: the Time to Pay arrangement.
What is the Time to Pay arrangement?
The Time to Pay arrangement allows you to settle your tax debt through manageable pre-agreed installments. By opting for this plan, you can reduce the impact of a large tax bill and maintain better control over your debt and cashflow.
Applying for Time to Pay:
Online Applications: You can conveniently apply for a Time to Pay arrangement online using HMRC's self-service system for self-assessment tax, Employer's PAYE, and VAT payments.
Contacting HMRC Directly: For other types of taxes or situations where online application criteria are not met, you can get in touch with HMRC to discuss your circumstances.
The Process:
When you contact HMRC at 0300 200 3835 to request a Time to Pay arrangement, be prepared to provide comprehensive information about all the taxes you owe. HMRC agents will inquire about your income, outgoings, savings, and assets, which could be used to reduce the overall amount owed. If you reach an agreement during the call, HMRC will typically set up a Direct Debit for your convenience.
The Self-Serve Time to Pay System:
If you don't have any existing payment plans or debts with HMRC and have already filed the relevant tax returns, the self-serve Time to Pay system might be the ideal option. However, remember that HMRC is not obliged to offer installment plans for tax payments.
Eligibility for Self-Serve Time to Pay:
Self-Assessment: You must apply within 60 days of the payment deadline and owe no more than £30,000.
Employer's PAYE: Your application should be within 35 days of the deadline, and the amount owed must not exceed £15,000. The maximum repayment period is six months.
VAT: You can apply within 28 days of the due date if you owe no more than £20,000. Please note that this option is not available for businesses using cash accounting or annual accounting schemes.
Facing Tax Difficulties:
In case you encounter difficulties with your tax liabilities, it's advisable to work closely with your accountant. Regular forecasts can help predict potential financial challenges well in advance. In unforeseen circumstances, setting up a suitable payment plan with HMRC is a wise approach. Ignoring tax problems can lead to severe penalties and legal action.
Conclusion:
Paying taxes on time is crucial, but HMRC understands that financial situations can be challenging. The Time to Pay arrangement offers a lifeline to those who need it, allowing them to settle tax debts through manageable installments. Whether you choose the self-serve system or contact HMRC directly, being proactive in managing your taxes is essential for avoiding unnecessary complications. So, if you're facing difficulties, don't hesitate to explore Time to Pay as a viable solution. Remember, taking the right steps now can lead to a more stable financial future.
Reach out to us today to discuss your Time to Pay Arrangement Options.