How to pay your Self Assessment Tax

HMRC will let you know how much tax you owe through self assessment after your tax return has been submitted and processed.

In order to know how to pay HMRC self assessment tax it’s crucial to understand when these payments are required.

The self assessment tax payment deadlines are as follows:

• 31st January: Balancing payment for the previous tax year and the first payment on account for the next tax year if applicable.
• 31st July: Second payment on account if applicable.

Getting your self assessment tax bill paid on time is vital to avoid HMRC interest charges and potential penalties for late payment.

When it comes to dealing with your tax obligations understanding the HMRC self assessment tax paying process can be a daunting task.

In this guide we unravel the steps, deadlines, and methods you can use to fulfil your self assessment tax bill obligations.

How do I pay my Self Assessment tax bill?

HMRC offers several payment methods to pay your self assessment tax bill most of which can be processed online through your self assessment tax account or the HMRC app.

The most common ways to pay self assessment tax include:

• Personal debit card.
• Corporate credit or debit card.
• Direct Debit.
• Online banking.
• Bank transfer (BACS or faster payment).
• Bank CHAPS payment.
• In person at your bank or building society branch.
• By cheque through the post.

If you want to pay your self assessment bill without signing in to your tax account or the HMRC app you can. You’ll need your ten digit UTR number and the exact amount you want to pay HMRC.

This payment option is only available for individuals wanting to pay by bank account, a one off direct debit or debit or corporate credit card.

Self Assessment timeframes for payment processing

Depending on the payment method you choose the time it takes for your payment to reach HMRC varies.

It’s worth noting the different processing times so you don’t miss your deadline because of a bank processing delay.

You don’t want to incur an HMRC penalty just because of the time it takes to process your payment.

Here’s a list summarising the different payment methods and the expected processing times:

• Online banking: Typically within 24 hours.
• Debit or corporate credit card online: Typically within 24 hours.
• Bank by faster payment or CHAPS: Typically within 24 hours.
• In person at your bank or building society: Typically within 24 hours.
• BACS: Inside 3 working days.
• Direct Debit (existing with HMRC): Inside 3 working days.
• Cheque through the post: Inside 3 working days.
• Direct Debit (new with HMRC): Inside 3 working days.

At peak times especially around the self assessment payment deadline HMRC’s online payment services can sometimes slow down.

HMRC provides updates on their service availability on their website.

To avoid any issues it’s advisable to file your tax return and make your payment ahead of the deadlines.

Your payment should show as received by HMRC within an average timescale of between 3 to 6 days from when your payment has been made.

You can check if HMRC has received your payment by logging in to your tax account or HMRC app.

Options on how to pay your self assessment tax

HMRC provides a couple of payment options for individuals who can’t pay all of their tax bill by the deadline or want to pay some or all of their tax bill upfront before the deadline.

The conditions and procedures for doing this vary depending on whether you’re paying against your latest bill or making advance payments against your next bill.

Time to pay is worth considering if you are struggling to pay your SA tax bill in full and a budget plan is a sensible choice if you want to pay some tax or all of the income tax you owe upfront.

What is HMRC time to pay?

If you’re unable to pay your self assessment tax bill in full you may be able to set up a payment plan online to spread the cost provided you meet the following criteria:

• You owe HMRC £30,000 or less. If you owe more than £30,000 a plan may still be arranged but not organised online.
• You don’t have any other payment plans or debts with HMRC.
• Your self assessment tax returns are up to date.
• It’s less than 60 days after your HMRC payment deadline.

A time to pay arrangement can typically be submitted and approved online via your HMRC tax account or by phoning the HMRC self assessment helpline on 0300 200 3820.

What is an HMRC budget payment plan?

For self employed individuals in certain circumstances you can pay your self assessment tax bill in instalments upfront before it’s due by setting up a budget payment plan (BPP).

If you want to save for your next tax bill you can set up a budget payment plan online through your tax account. It let’s you choose a figure which will be collected on a weekly or monthly basis.

Making payments in this way is a sensible choice for the self employed who want to regularily put something towards their next income tax bill instead of paying in one lump sum.

Paying Self Assessment Tax through your tax code

If you’re employed under PAYE you may be able to pay your self assessment bill through your PAYE tax code provided:

• You owe less than £3,000 on your tax bill.
• You already pay tax through PAYE.
• You submitted your paper tax return by 31st October or your online tax return by 30th December.

HMRC will by default recover the tax you owe via your tax code unless you’ve expressly requested otherwise on your self assessment tax return.

If agreed by HMRC your tax code will increase to include the value of the tax you owe which is then deducted at the same time as your other deductions by your PAYE income source.

There are certain circumstances where this isn’t possible. For example if you don’t have enough PAYE income for HMRC to collect it or if you’d end up paying more than 50% of your PAYE income in tax.

Don’t forget second payments on account

Second payments on account are mandatory for some self employed taxpayers (depending on taxable income levels) and are based on an estimation which presumes that your current tax year’s income will be equivalent to or more than the past year.

If you’re unsure if you owe a second payment on account you should check with your accountant or HMRC tax account so you don’t miss the payment deadline.

In cases where your income is different from the previous tax year you can ask HMRC to change your second payment on account by providing an explanation and any requested evidence.