HMRC is switching more of its services online to reduce telephone contacts from taxpayers and advisers. This month it launched an online service to arrange time to pay a tax debt.
It is open to individuals who submit a self-assessment tax return who have an income tax and NIC debt of between £32 and £30,000. The debt must be paid by instalments over 12 months by setting up a monthly direct debit. If a longer payment period is required, or the debt is larger than £30,000 a time to pay schedule can still be arranged through the self-assessment payment helpline: 0300 200 3822.
The guidance says the instalment plan must be set-up no later than 60 days after the due date for the tax. This rules out income tax debts that became due in July 2020 or earlier, although in most cases the 31 July payment on account for 2019/20 was automatically deferred until 31 January 2021. Interest will be charged on self-assessment liabilities still outstanding at 1 February 2021 where the online arrangement is used.
The online facility also can only be used if the taxpayer has no other tax debts, eg older debts or another tax (eg VAT). The taxpayer must also have no outstanding tax returns due for submission.
Taking into account all of these conditions it appears that the online time to pay service will not be of much use immediately as the tax debt which it could apply to has generally been automatically be deferred until 2021.