by Asim Abbas
11 November 2026 
Can’t pay your tax bill? How HMRC Time to Pay works
Can’t pay your tax bill? How HMRC Time to Pay works
If you can’t pay your Self Assessment bill in full by 31 January, don’t ignore it. HMRC’s Time to Pay arrangements let you spread the cost over monthly instalments.
- Set up a plan online for Self Assessment debts up to £30,000
- You must have filed your return first
- Interest is still charged, at base rate plus 4%
- An agreed plan can stop late payment penalties growing
You can set up many plans online in minutes, and acting early stops penalties building up.
This guide explains who can apply, how much it costs and what happens if you miss a payment.
Who can set up a plan online?
- You owe £30,000 or less for Self Assessment
- Your latest tax return is filed
- You have no other HMRC debts or payment plans
- You apply within 60 days of the payment deadline
If you don’t meet these conditions, you can still call HMRC’s Payment Support Service. HMRC will ask about your income, spending and savings to agree an affordable plan.
How to set it up
- Sign in to your HMRC online account
- Choose to set up a payment plan
- Pick an affordable monthly amount and payment date
- Pay by Direct Debit
Plans can also cover your next payment on account, so you don’t fall behind again in July.
Late tax return penalty calculator
See penalties and interest.
What it costs
There’s no fee, but late payment interest is charged on the outstanding balance at the Bank of England base rate plus 4%. Late payment penalties of 5% apply at 30 days, six months and 12 months after the due date, but if you set up a plan before the penalty date and stick to it, that penalty isn’t charged.
Ben owes £6,000 on 31 January 2027. He sets up a 12-month Time to Pay plan on 10 February, paying about £520 a month. Because the plan is agreed before the 30-day penalty date, he avoids the £300 penalty. He pays interest at around 7.75% a year on the reducing balance, roughly £250 over the year.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179If you miss a payment
Contact HMRC straight away. If you break the plan without telling them, HMRC can cancel it, ask for the full balance and start enforcement, including debt collection agencies or taking money directly from your bank account in some cases.
Tips for a successful plan
- Apply early, before the 30-day penalty date
- Only commit to what you can afford
- Remember your July payment on account
- Consider asking to reduce payments on account if your income has fallen
- Keep filing returns on time
Business taxes
Businesses can also use Time to Pay for VAT, PAYE and Corporation Tax. Employers can set up online plans for PAYE debts up to £50,000 in some cases, and VAT-registered businesses for up to £50,000. Larger debts need a call with HMRC.
See HMRC’s guidance on difficulties paying HMRC, our guide to payments on account and late filing penalties.
What should I do next?
A plan needs it.
Ideally before day 30.
Including July.
Frequently Asked Questions
Can I pay my tax bill in instalments?
Yes. HMRC Time to Pay lets you spread Self Assessment debts, online up to £30,000.
Is interest charged on Time to Pay?
Yes, at the Bank of England base rate plus 4%.
Will I still get a late payment penalty?
Not if you agree a plan before the penalty date and keep to it.
What if I owe more than £30,000?
Call HMRC’s Payment Support Service to agree a plan.
What happens if I miss a payment?
Contact HMRC immediately. Otherwise the plan may be cancelled.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
