One of the measures announced by HMRC at the start of the coronavirus pandemic was the introduction of emergency measures to help those affected by COVID-19 using the existing Time to Pay service. Businesses and self-employed people in financial distress, and with outstanding tax liabilities may be eligible to receive support with their tax affairs through this service.

There is an option to set up an online payment plan to spread the cost of your latest Self-Assessment bill due on 31 January 2021 over the following 12 month period. The limit for making an online payment plan increased to £30,000 (from £10,000) with effect from 1 October 2020.

In order to use the online payment plan you must meet the following requirements:

• Have no outstanding tax returns
• No other tax debts
• No other HMRC payment plans set up.

In addition, your debt needs to be between £32 and £30,000, and the payment plan needs to be set up no later than 60 days after the due date of a debt. You can choose how much to pay straight away and how much you want to pay each month. Interest will be applied to any outstanding balance from 1 February 2021.

HMRC has said that around 95% of taxpayers who are due to make payments on 31 January 2021 could qualify to implement a Time to Pay arrangement online, without needing to speak to an HMRC adviser.

Taxpayers with Self-Assessment tax payments of over £30,000, or who need longer than 12 months to pay in full, can still apply to set up a time to pay arrangement by calling the Self-Assessment payment helpline or the dedicated COVID-19 helpline.