If you cannot pay your tax bill on time, the situation can feel stressful, but avoiding it can make the position harder to manage. The first useful step is to establish exactly what is due, when it is due and what you can realistically pay. That gives you a basis for contacting HMRC and planning the months ahead.
Cannot pay your tax bill? Check the amount first
Confirm the tax year, tax type and payment reference. For Self Assessment, check whether the figure includes a balancing payment or payments on account for the next year. Review the return and HMRC statement for mistakes or missing payments. If you think the bill is wrong, raise that separately; uncertainty about the calculation should not stop you from addressing a genuine amount due.
If you cannot pay your tax bill, speak to HMRC early
HMRC may be able to agree a payment plan, often called a Time to Pay arrangement, if you cannot pay by the deadline. Eligibility and the options available depend on your circumstances and the type and amount of tax. You may be asked about your income, spending, assets and other debts. Be ready with a realistic proposal that you can maintain alongside current tax obligations.
If online setup is available for your Self Assessment bill, use the official HMRC service. Otherwise, contact HMRC through its published channels. Do not assume an arrangement has been accepted until it is confirmed. Interest may still apply while a tax debt remains unpaid.
Protect the next tax payment too
A plan for one overdue bill will not work if new tax liabilities are ignored. Update your cash forecast, set aside a manageable amount from future receipts and look at why the shortfall arose. It may reflect a one-off event, slow customer payments, a higher-than-expected profit or insufficient reserves. The response should match the cause.
If you run a company, separate its tax debts from your personal Self Assessment position. The processes and responsibilities are different. An accountant can help you check the numbers and prepare a credible proposal, but only HMRC can agree its payment terms.
Start with HMRC’s guidance on paying a Self Assessment bill. AA&R Certified Accountants can review your figures and help you plan for future bills. Contact us before the position becomes harder to resolve.
Related reading: How Much Tax Should a Small Business Set Aside Each Month?.