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HMRC extends threshold for self-employed “time to pay” applications

In a move to ease financial stress of coronavirus on self-employed people, the limit for “Time to Pay” has increased from £10k to £30k. This means that self-assessment taxpayers can pay up to £30k of tax owed for 2019-20 in monthly instalments rather than in two payments in January and July.

HMRC estimates around 95% of self assessment taxpayers who are due to make payments on 31 January 2021 could qualify to implement a time to pay arrangement using the online facility, without needing to speak to an HMRC adviser.

In order to benefit, taxpayers must meet a set of requirements:

  • That they have no outstanding tax returns
  • That they have no other tax debts
  • That they have no other HMRC payment plans set up
  • The tax owed needs to be between £32 and £30k
  • The instalment plan must be set up within 60 days of the payment due date

Individuals with self assessment tax payments over £30k, or who need longer than 12 months to pay, may still be able to set up a Time to Pay arrangement by calling the self-assessment payment helpline on 0300 200 3822.

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