"What assistance can I receive from HMRC if I am unable to pay my tax bill"

We outline what happens if you are unable to pay your tax bill to HMRC before the self-assessment tax return deadline

Millions of people must file their self-assessment tax returns by January 31 at 23:59, failing which they will automatically be fined £100.

For the 2024 - 2025 tax year, individuals who made more than £1,000 from sources other than PAYE work must file their self-assessment tax return and pay their tax bill by the deadline.

Before the deadline, those impacted should ideally already have the money needed to pay the bill.

However, there is support for those who don't.

Individuals who are unable to pay their tax bill in full by January 31st may be able to spread the cost over monthly installments by setting up a "Time to Pay" arrangement with HMRC online.

Nearly 18,000 taxpayers have already used "Time to Pay" since April 6, 2025, according to HMRC, which gives taxpayers more flexibility by setting up regular payments that fit their unique situation.

This is the scheme's operation and who can utilize it.

How long does HMRC take to pay?

If a British person is unable to pay their tax bill in full on January 31st, they can use HMRC's "Time to Pay" program to pay it in regular installments.

Your monthly disposable income and the amount of tax you owe will determine how much each of you is required to pay.

According to HMRC, you will typically be required to contribute about half of your monthly disposable income to the tax you owe.

For taxpayers who are unable to raise the required funds by January 31st, a repayment plan may be a good option. However, using "Time to Pay" will result in interest.

The interest rate you will be assessed is 2.75 percent, which is less than the 5 percent late payment interest rate and penalties.

Contact HMRC as soon as possible if you believe you might need to use "Time to Pay."

How the HMRC Time to Pay plan is applied for.

The government's official website offers an online portal for "Time to Pay" applications.

You must file your tax return by January 31st in order to set up a payment plan, so be sure to do so.

You will need your bank account information to set up a direct debit and your special tax reference number to set up a payment plan.

You will be asked questions concerning your income and expenses during the application process. The repayment plan typically lasts 12 months, but depending on your situation, it may last longer or shorter.

You shouldn't need to get in touch with HMRC directly if your unpaid tax bill is less than £30,000 and you apply within 60 days of the January 31 deadline.

You may still be eligible for a payment plan if your outstanding tax bill is more than £30,000, but you will need to get in touch with HMRC directly.

There are still several reasons why HMRC may reject your "Time to Pay" application. If you have other outstanding debt with HMRC or if the tax collector believes you won't be able to make the monthly payments, you might be turned down.

What are the late tax return and late payment penalties?

You will be charged high fees if you fail to file your tax return by the deadline or if you owe HMRC money and don't pay it by midnight on January 31, 2025.

Penalties for filing late.

If you fail to file your tax return by the deadline of January 31st, you will automatically be fined £100, and the longer you wait, the more you will be penalized.

In addition to the initial fine, you will be assessed 10 per day for 90 days, up to a maximum of 900, if you fail to file your tax return within three months.

After six months, the prior fines will be increased by an additional penalty equal to 300 or 5% of the tax owed, whichever is higher.

It's an additional 5% or 300 after a year, whichever is higher.

Penalties for paying late.

You will be required to pay penalties and additional interest to HMRC if you do not pay your tax bill by the deadline of January 31.

At 30, 6, and 12 months after the deadline, you will be assessed penalties equal to five percent of the unpaid tax.

Additionally, you will be assessed 7.75 percent interest on the remaining tax that you owe HMRC. You should pay your tax bill or request "Time to Pay" as soon as possible to avoid late fees.