Following the announcement of the ability to defer tax payments in July 2020, the Government has announced  enhanced payment arrangements for those paying income and capital gains tax via self assessment.

HMRC has increased the upper threshold for online applications for time-to-pay to £30,000.


  1. What Has Changed?
  • The Chancellor has announced enhanced payment arrangements for taxpayers unable to pay their self assessment bill that falls due on 31 January 2021.
  • The enhanced payment arrangements applies to all tax due on that date including:
  • Deferred second payment on account for 2019/20 which was originally due on 31 July 2020;
  • Balancing payment for 2019/20 due on 31 January 2021;
  • First payment on account for 2020/21 due on 31 January 2021;
  • The amounts due can be paid in monthly instalments over a period of up to 12 months.


  1. Am I Eligible?
  • Taxpayers can set up a time to pay arrangement online if you meet the following requirements:
  • You have no outstanding tax returns (the 2019/20 tax return must have been filed and it must also have been processed by HMRC which can take 72 hours for a return filed online).
  • There must be no other tax debts, or HMRC payment plans set up.
  • The debt must be between £32 and £30,000;
  • Taxpayers who owe more than £30,000 or need longer than 12 months to pay may still be able to set up a time to pay arrangement by calling the self-assessment payment helpline on 0300 200 3822


  1. When Do I Have To Set Up The Plan?
  • The payment plan must be set up no later than 60 days after the due date of a debt e. by 1 April 2021.
  • However, to avoid late payment penalties the payment plan must be set up by the trigger date for late payment penalties which is 30 days after the due date i.e. by 2 March 2021.


  1. Will I Have To Pay Interest?
  • Interest will be applied to any outstanding balance from 1 February 2021;
  • This contrasts with the deferral of the second payment on account due in July 2020 on which no interest was charged;