January’s Self Assessment deadline can put pressure on cash flow, especially for sole traders and small businesses. If you’ve filed your tax return but can’t afford to pay the full amount, HMRC’s Time to Pay arrangement allows you to spread the cost in manageable monthly instalments.
Here’s a clear guide to how it works and who can use it.

At a glance

• Spread your Self Assessment bill into monthly payments
• Available for tax bills up to £30,000
• You must have filed your latest return
• No other HMRC debts or existing payment plans
• Usually repayable within 12 months
• Set up online through Government Gateway

What is Time to Pay?

HMRC’s Time to Pay arrangement lets you set up a monthly instalment plan to pay off your tax bill.
Interest still applies, but as long as you follow the agreed payments:

• you avoid late-payment penalties, and
• your account stays compliant with HMRC

It’s designed to support taxpayers who want to pay but need more time.

Who can use Time to Pay?

You can normally set up a Self Assessment payment plan online if all of the following are true:

• Your tax bill is £30,000 or less
• You’ve filed your current Self Assessment return
• You do not have other HMRC debts or active payment arrangements
• You are within 60 days of the payment deadline
• You can repay the full amount within 12 months

If you meet these criteria, you don’t need to call HMRC. You can set it up directly through your Government Gateway account.

What you need before applying

To set up Time to Pay online, you’ll need:

• Your Government Gateway login details
• Your Unique Taxpayer Reference (UTR)
• UK bank details to set up the Direct Debit
• A realistic idea of what you can afford each month

HMRC may ask simple affordability questions (income, expenses) to confirm the plan is manageable.

How to apply online

Once your tax return is filed, you can apply online:

👉 HMRC Time to Pay:
https://www.gov .uk/difficulties-paying-hmrc  

Log in using your Government Gateway and select “Set up a payment plan”.
You’ll be asked:

• How much you owe
• Whether you can pay anything now
• What monthly amount you can afford
• To confirm your Direct Debit details

HMRC will then generate your monthly instalment schedule.

If you owe more than £30,000

You won’t be able to apply online.
Instead, you’ll need to speak to HMRC directly to create a tailored plan:

📞 Self Assessment payment helpline: 0300 200 3401 

HMRC may ask for more detailed financial information.

Payments on account

If your tax bill includes payments on account, these can also be included in a Time to Pay plan.
If your income has dropped, you might be able to reduce your upcoming payments on account.

Just be careful as reducing them too much may lead to interest later.

Penalties and interest

Interest is charged daily on any unpaid tax.

Without a Time to Pay arrangement in place, HMRC can charge late-payment penalties at:

• 30 days late
• 6 months late
• 12 months late

A valid Time to Pay arrangement stops further penalties, as long as you make the agreed payments.

Quick steps to set up Time to Pay

1️⃣ File your Self Assessment return
2️⃣ Decide how much you can pay each month
3️⃣ Sign in to your Government Gateway account
4️⃣ Select “Set up a payment plan”
5️⃣ Confirm your Direct Debit details

Useful links

• Set up a Self Assessment payment plan
  https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments  

• If you cannot pay your tax bill
  https://www.gov.uk/difficulties-paying-hmrc