As UK households prepare for the added costs of the Christmas and New Year festivities, it is essential to remember that there are ways to ease the burden of upcoming tax bills. HM Revenue and Customs (HMRC) has introduced an online Time to Pay system, allowing individuals to establish regular monthly payments for their tax liabilities.
To date, over 15,000 self-assessment taxpayers have successfully set up a Time to Pay plan for the 2023-2024 financial year. There is still an opportunity to enrol, with the online deadline for filing tax returns and settling any owed taxes set for January 31, 2025.
Eligibility and Payment Options for Taxpayers in Need
For those unable to pay their tax bill in full, with debts under £30,000, the Time to Pay system offers a straightforward online application process, eliminating the need for direct contact with HMRC. Individuals owing more than £30,000 may still apply, but must reach out to HMRC for assistance.
Key Details of the Time to Pay System:
- Eligibility: Individuals who owe less than £30,000 can apply online without direct contact with HMRC. Those with debts above this amount must contact HMRC.
- Payment Duration: Payments can be spread over a maximum of 12 months.
- Initial Requirement: Taxpayers must complete their self-assessment tax return before setting up the payment plan.
- Budgeting: Regular monthly payments should be budgeted to avoid missed payments, which incur interest and penalties.
- Deadlines: The deadline for filing tax returns and paying owed taxes is January 31, 2025.
HMRC Commitment to Taxpayer Support
Myrtle Lloyd, HMRC’s Director General for Customer Services, emphasized the agency’s commitment to supporting taxpayers: “We’re here to help customers get their tax right. If you are concerned about how to manage your self-assessment bill, we provide options for help and support. Customers can tailor their online payment plans to fit their financial circumstances, spreading payments over a maximum of 12 months. This flexibility can be invaluable for those needing extra time to meet their tax obligations.”
Prepare Early: Key Tips for Tax Return Success
HMRC encourages taxpayers to prepare early and gather all necessary information to file their tax returns promptly, helping to avoid the stress of last-minute submissions. Additionally, those who have received a Simple Assessment letter should note that the deadline for payment is also January 31, 2025. Unlike regular self-assessment taxpayers, Simple Assessment recipients do not need to register or file a full tax return.
Understanding Simple Assessments: Deadlines and Support Resources
Simple Assessment letters are issued to individuals with unpaid income tax for the 2023-2024 tax year that cannot be deducted through Pay As You Earn (PAYE) by an employer or pension provider. Should a Simple Assessment letter be received on or after October 31, 2024, taxpayers have a three-month window to clear their outstanding tax bill.
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