You are here: Home - Saving-Banking - News -

Thousands unable to pay tax bill opt for instalments charging 6% interest

Written by:
More than 45,000 self-assessment customers have set up a payment plan with HMRC to help spread the cost of their tax bill, paying 6% interest for the pleasure.

Figures from HMRC revealed 45,657 self-assessment customers have used its Time to Pay service since April 2022 as they have been unable to meet their tax bills.

Workers on self-assessment can use Time to Pay to spread the cost of tax bills up to a value of £30,000 over 12 months if they’re unable to pay in full.

In December alone – a month before the 31 January deadline to submit the 2021/22 tax return and pay any tax owed – HMRC revealed 10,500 customers set up a plan, totalling more than £36m.

While the payment instalment plan gives people breathing space, it’s important to note that interest is applied to the amount. This rises in line with the Bank of England base rate, which means customers are paying 6% on the outstanding amount.

65,000 pay self-assessment via app

Meanwhile, HMRC also noted that almost 65,000 customers have paid their self-assessment bills, totalling nearly £67m via its app since April 2022.

Last month alone, 14,170 people paid via the app – the highest number of app payments in any month since its launch in February 2022.

It is also encouraging customers who have yet to file to go to the app before calling HMRC in a month which is traditionally the busiest time of the year as the tax return deadline looms.

HMRC said the app is a “quick, free and secure way” to view your National Insurance number, Unique Taxpayer Reference or make a payment in 60 seconds”.

Just last week HMRC was ordered to explain long call wait times and outages after reports revealed customers were kept on hold for hours before being cut off without speaking to staff.

HMRC is expected around 12 million tax returns to be submitted this month. Anyone who files their tax return or pays tax owed after 31 January faces an instant £100 penalty as well further fines for late submissions.

Myrtle Lloyd, HMRC’s director general for customer services, said: “We want to help self-assessment customers meet their obligations and HMRC offers a range of options to help customers pay their tax return bill. To choose the option that suits them, customers can search ‘pay my self-assessment’ on GOV.UK to find out more.”

Related: Seven ways to legally cut your tax bill
10 tips to help you meet the 31 January tax return deadline

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week