As we head towards the Self Assessment Tax Return filing deadline, HMRC customers will be calculating their tax liability due for payment by 31 January 2022.

This payment date is still relevant even with the extended Self Assessment Tax Return filing deadline through to 28 February 2022.

HMRC acknowledge that some customers may find it difficult to pay their bill and so offer a Time to Pay arrangement.  This is also available to businesses who may be in difficulty.

Initially, disposable income is determined and then an agreement, at less than 50%, is offered.  This would normally be done over the phone, but for Self Assessment if you owe less than £30,000 in tax; have submitted all your Tax Returns and have no other tax outstanding, you can, within 60 days of the payment deadline, set up the payment plan online.

As an agent, we are limited as to the support that we can offer in getting a payment plan in place.  We therefore advise clients, once their Tax Return has been filed and the liability shown on their Self Assessment account (usually after 72 hours), to phone HMRC.  This is because, a direct debit will need to be approved by the customer.

Be prepared for a number of questions to be asked about your income and outgoings and have an idea of how much you are able to pay initially and over what timescale the balance can be paid.

Having a formal Time to Pay arrangement will prevent late payment surcharges from arising (as long as the terms agreed are met).  However any tax covered by a Time to Pay arrangement will have interest charged so the quicker it can paid the better.

If you think that you are going to have difficulties in settling the tax liability due on 31 January, please contact Angela Pannell, our Tax Manager, who can guide you through the process.

The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.

Lambert Chapman Chartered Accountants

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