We are all familiar with the 31 January deadline for the payment of Self Assessment tax bills to HMRC. The last twelve months have been a difficult time for many businesses. This fact has not gone unnoticed by HMRC who have recently expanded an online service which now allows more people to spread payment of their January 2021. To date almost 25,000 Self Assessment customers have set up an online payment plan to manage their tax liabilities. It is believed that around 95% of Self Assessment taxpayers due to make a payment by 31 January 2021 will be able to use this self-serve option.

The effects of COVID-19

Many individuals and small businesses alike are suffering during the Covid-19 pandemic. Keen to support people who cannot afford to pay their tax bill in January in one go, HMRC have responded by allowing payment of our Self Assessment tax bills to HMRC to be set up by payment in instalments. An online service has been recently expanded, so that instalments can be arranged. No need to consider it with HMRC staff first, or provide details of current income and expenditure.

How it works

Once you have completed and submitted your 2019/2020 tax return, you will know how much you are due to pay by 31 January 2021. If you are eligible, you can set up your payment plan anytime up to the end of March 2021. The sooner it is sorted the better! If it’s not sorted out before the end of February you will receive a 5% surcharge on your tax liability.

Setting up an instalment plan is a simple process. You can be access it here or through your Government Gateway account. If you don’t have a Government Gateway account, this can be set up at the beginning of the process. There you will find the online tool.

You will still have to pay interest on any tax owed which  will be applied to any outstanding balance from 1 February 2021.


To be eligible to set up an instalment plan, you must meet all the criteria. You…

  1. must have no outstanding tax returns, debts or existing payment plans with HMRC,
  2. owe no more than £30,000,
  3. must set up the payment plan within 60 days of the original payment date,
  4. have to pay the instalments by direct debit.

If you aren’t eligible to use HMRC’s online payment plan tool, if so contact HMRC directly to discuss setting up a payment plan. This may be if the Self Assessment debt is over £30,000, you need longer than 12 months to pay your debt in full. You may still be able to set up a Time to Pay arrangement by calling the Self Assessment Payment Helpline. You can do this either via calling HMRC’s Self Assessment payment helpline 0300 200 3822 or their coronavirus helpline 0800 024 1222.

A warning!

There are lots of copycat HMRC websites and phishing scams. Be alert if someone calls, emails or texts claiming to be from HMRC, saying that they can claim financial help, you are due a tax refund or owe tax. It might be a scam.

Find out more

Visit Gov.UK to find out more about Payments on Account.