Can I pay my January tax by instalments?

Tax Installments

“Can I pay my January tax by instalments?” asks Jenny, a client. 

The good news for Jenny is that she can, but there are conditions attached. 

The deadline for submitting your 2019-20 Self-Assessment tax returns online is 31 January 2021. 

The good news is that there is an option to defer payments due on 31 January 2021 and pay by instalments over 12 months. This includes a self-serve Time to Pay facility online for debts up to £30,000 or by arrangement with HMRC.

So, how can you pay your January tax by instalments? 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 can choose how much to pay straight away and how much they want to pay each month.

If you have Self-Assessment tax payments of over £30,000 then sadly you won’t qualify automatically for a deferred payment plan. This also applies if you need longer than 12 months to pay an amount of less than £30,000 in full. However, you can still set up a time to pay arrangement by calling the Self-Assessment payment helpline or the dedicated COVID-19 helpline.

Taxpayers using either option will be required to pay interest on any outstanding balance from 1 February 2021.

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