HM Revenue and Customs (HMRC) has recently issued a timely reminder about the support available to taxpayers as the Self-Assessment deadline nears. With 31 January 2026 fast approaching, many businesses, sole traders and individuals are understandably starting to feel the pressure of meeting their tax obligations. To help manage this, HMRC is highlighting the Time to Pay service, which allows taxpayers to spread their Self-Assessment tax bill over a series of monthly payments rather than paying everything in one lump sum by the deadline.
This update is particularly relevant as nearly 18,000 Self-Assessment payment plans have already been set up since the start of the tax year on 6 April 2025. It shows that many taxpayers are finding the flexibility afforded by Time to Pay helpful as part of wider financial planning.
What is the Time to Pay service?
Time to Pay is not a new concept, but recent publicity from HMRC serves as a useful reminder of how it works and why it might be helpful. Broadly, the service allows taxpayers who cannot pay their Self-Assessment tax bill in full by the 31 January deadline to:
- Set up a tailored repayment plan, spreading their liability over monthly instalments.
- Avoid late payment penalties by agreeing terms that reflect what they can realistically afford.
- Make use of online channels to set up a plan for bills up to a specified threshold without needing to speak to HMRC directly.
For many taxpayers with bills of up to £30,000, a payment plan can be arranged online via the Government Gateway or the HMRC app as soon as their Self-Assessment return has been filed. This avoids the need to call or negotiate directly with HMRC in many cases.
If the tax owed is more than £30,000 or if a longer repayment period is needed, the taxpayer can still seek support, but they will need to contact HMRC directly to discuss and agree terms.
Why this matters now
The Self-Assessment system requires businesses and individuals to calculate and pay their tax liabilities by 31 January each year. While many taxpayers plan for this in advance, unexpected circumstances, rising costs or irregular income can make it hard to settle the tax bill in full by the due date.
By promoting Time to Pay, HMRC aims to encourage taxpayers to act early, rather than waiting and risking automatic penalties and interest. An agreed Time to Pay arrangement can minimise stress around the deadline and help taxpayers manage cash flow more effectively through the winter months.
It is important to note that interest on the unpaid amount continues to accrue during the repayment period, and taxpayers should plan accordingly. However, the interest charged under a structured plan is usually less onerous than the cumulative impact of penalties that would otherwise apply if payments were missed or late.
Simple Assessment and other reminders
In addition to the Time to Pay service, HMRC is also reminding customers who have received a Simple Assessment letter that they do not need to complete a full Self-Assessment return. Instead, these customers have three months from the date of their letter to pay any tax owed for the 2024 to 2025 tax year.
Simple Assessment is issued where income tax cannot be collected through Pay as You Earn (PAYE) by employers or pension providers, and it simplifies the process for individuals who have relatively straightforward tax situations.
Conclusion
HMRC’s renewed emphasis on Time to Pay reflects an understanding that taxpayers often face real challenges in meeting lump sum tax obligations, especially in a period of ongoing cost pressures. Being aware of the support available and helping affected clients make the necessary arrangements sooner rather than later can make a meaningful difference to their financial wellbeing.
