Help if you’re struggling to pay your Income Tax bill

What to do if you can’t pay your Income Tax bill

It’s important to contact HMRC if you’re unable to pay your tax bill. If you don’t pay it on time, you’re likely to end up paying interest and fines on the outstanding amount.

HMRC might also:

  • collect it straight from your earnings or pension
  • get a debt collection agency (bailiff) to recover the money – they might take things you own and sell them (if you live in England, Wales or Northern Ireland)
  • take money from your bank account or building society (if you live in England, Wales or Northern Ireland)
  • take you to court
  • make you bankrupt or close your business.
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Support to help you defer income tax and VAT

If you were due to make a VAT payment between 20 March and 30 June 2020, it will automatically be deferred. This means you can make a payment any time until 31 March 2021.

A payment deferral means you’ll have a larger tax payment at a later date. So if you can avoid postponing the payment, you’ll avoid a bigger bill in future.

If you’d prefer to make the payment as usual, you can do this by paying in the usual way.

If you’ve already missed your payment date or you can’t use the online service, call HMRC’s self-assessment helpline on 0300 200 3822.

If you’re going to struggle paying VAT

No interest or penalties will be added to what you owe if you wait to pay.

If you usually pay by Direct Debit, and you want to postpone paying, contact your bank as soon as you can. Otherwise, the payment might be automatically taken when you’ve submitted your VAT return.

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You’ll then need to set up the Direct Debit again in time for your next VAT period after 30 June 2020, or consider other payment arrangements.

You still need to complete your VAT returns during this period and submit them on time. If this isn’t possible, keep a record of what caused the delay, as this will be used as evidence during an appeal against late filing penalties.

The deferral is available to businesses of all sizes and it applies automatically.

What you need to prepare when asking HMRC for help

You’ll need to suggest how much you can afford and over what length of time you can make the repayments.

To come up with this, make sure you:

  • work out how much you have coming in and note down any risks to your income in future
  • make a budget – making sure you can cover any living costs and other priority debts
  • come up with an amount that you’d be comfortable paying back every month
  • using that monthly figure, work out how long it would take to pay off.

If your situation changes, you can call them again to explain the situation and suggest a new repayment plan.

If HMRC don’t agree to your repayment plan ideas, they’ll use the information you gave to come up with another repayment arrangement.

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If you’re struggling to meet other bills and payments

If you’ve lost income, you might be able to claim a grant through the Self-employment Income Support Scheme to help you keep up with payments.

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Make an emergency budget

If you’re worried about cashflow, have a look at what you’re spending and what income you have coming in.

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You can also look at ways to reduce your household bills, such as switching providers for your gas, electricity or mobile phone contracts.

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When to get debt advice

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Extra support if you’re struggling financially and with your mental wellbeing

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Having mental health issues might mean that you struggle to make the best money-based decisions for you, as well as act on them.

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Remember, if you’re struggling financially and with your mental wellbeing, it’s worth getting in contact with your bank, building society, lender or whoever you owe money to, to discuss your options.

However, picking up the phone and talking about your problems is often easier said than done when you’re struggling with your mental health.

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Most places that you owe money to have policies about supporting you if you’re vulnerable. But they can’t help you unless you ask.

For some general tips on how you can manage your mental health check out Rethink’s guide. It covers everything from setting a budget to getting help if you, or someone you care about, is having a mental health crisis.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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