Time To Pay limits increased

One of the measures announced by HMRC at the start of the coronavirus pandemic was the introduction of emergency measures to help tax payers affected by COVID-19 to use the Time To Pay service.

Businesses and self-employed people in financial distress and with outstanding tax liabilities may be eligible to receive support with their tax affairs by accessing this service.

An online payment plan was available to set up instalment arrangements for paying tax liabilities up to £10,000. This limit has now been increased to £30,000 from 1 October 2020.

HMRC estimates around 95% of Self-Assessment customers who are due to make payments on 31 January 2021 could qualify to implement a Time To Pay arrangement using the self-serve, online Time To Pay facility, without needing to speak to an HMRC adviser.

Taxpayers that want to use the online option must meet the following requirements:

  • Have no outstanding tax returns
  • No other tax debts
  • No other HMRC payment plans set up.

The debt needs to be between £32 and £30,000, and the payment plan needs to be set up no later than 60 days after the due date of a debt.

Taxpayers using self-serve Time To Pay will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

Taxpayers with Self-Assessment Tax payments of over £30,000, or who need longer than 12 months to pay in full, may still be able to set up a Time To Pay arrangement by calling the Self-Assessment payment helpline.

Source: HM Revenue & Customs Wed, 14 Oct 2020 00:00:00 +0100

Latest articles

Notifying cessation of self-employment

Any taxpayers that have ceased to be self-employed must notify HMRC of their change in status. There are a number of steps that must be followed if a taxpayer ceases trading as a sole trader or if they are ending or leaving a business

Submitting CIS nil monthly returns

The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the construction industry. Businesses in the construction industry are known as ‘contractors’ and ‘subcontractors’ and should be

Check employment status for tax

The Check Employment Status for Tax (CEST) tool can be used to help ascertain if a worker should be classified as employed or self-employed for tax purposes in both the private and public sector.

The service provides HMRC’s view if IR35 legislation

Class 1A payment deadline

Class 1A NICs are paid by employers in respect of most benefits in kind provided to employees such as a company car. There is no employee contribution payable. If you provided taxable benefits to staff or directors your business is likely to have a