There are a number of reasons why as a self-employed professional and tax filer you may not be able to pay your tax owed on time; from a miscalculation to an unexpected emergency. If you have realised you are not going to be able to make your tax payment on time, don’t panic. It is important to let the HMRC know that you are going to be unable to pay on time as soon as possible.

One of the most common options in the scenario where you are unable to pay your tax due on time is to set up an HMRC payment plan to pay in instalments. In order to set up an HMRC payment plan, you will need a Government Gateway user ID and password.

 Although it is likely you will have to pay interest by paying late, you can avoid penalties by contacting the HMRC as soon as you realise you will not be able to pay online.

Before you contact HMRC

You’ll need to know:

·       your reference number (for example, your 10-digit Unique Taxpayer Reference or VAT reference number)

·       the amount of the tax bill you’re finding it difficult to pay and the reasons why

·       what you’ve done to try to get the money to pay the bill

·       how much you can pay immediately and how long you may need to pay the rest

·       your bank account details

What happens when you contact HMRC

HM Revenue and Customs (HMRC) will ask you about:

·       your income and expenditure

·       your assets, like savings and investments

·       what you’re doing to get your tax payments back in order

The HMRC will then decide whether you should be able to pay immediately. If they determine not, they’ll decide whether you’ll be able to get your payments back on track with more time.

If you have been given more time to pay before they will ask more questions and may even ask for evidence.

Contact us for expert UK personal tax advice