What you should know about paying your Self Assessment Tax Bill
If you owned a Business in the tax year 2021/22, or you were a Self Employed Sole Trader and earned more than £1,000 (before taking off anything you can claim tax relief on), then you need to pay Self Assessment Tax. Hubu Accountants in Wales have been helping our clients in preparing to pay, and informing them of the new Self Assessment Payment Plan set up by HMRC.
It’s important to pay your Self Assessment Tax Bill on time to avoid any late penalty fees, but the good news is that you have a few options of how you pay, which your Accountant can inform you of. If you’ve missed a Self Assessment payment deadline, or you know you won’t be able to pay your bill on time, you might be able to pay off your latest Self Assessment tax bill in installments - this is called a ‘Time to Pay’ arrangement. The first thing you need to do though, is contact HMRC as soon as possible to make them aware of your situation and avoid unnecessary late fees.
Remember - due to the pandemic, some of the rules around penalties for Self Assessment have changed. Find out what happens if you’re late paying your Self Assessment tax.
You can set up a Self Assessment payment plan by using your Government Gateway account, if you meet the following criteria:
You’ve filed your latest tax return
You owe less than £30,000
You’re within 2 months of the payment deadline
You are planning to pay your debt off within the next 12 months or less
There is no time limit to how long your Time to Pay arrangement lasts. It all depends on how much you owe and what you can afford to pay every month. If you’re struggling or can’t pay at all, then HMRC may ask a debt collection agency to collect the money from you, or they can collect what you owe directly from your wages or any monthly pension payments you get: you can find out more info here.
It’s a good idea to set up a Payment Plan if you want to make regular monthly or weekly payments towards your next tax bill. To set up your Budget Payment Plan, go to your HMRC online account (your Government Gateway Account) and set up a Direct Debit. Choose the Budget Payment Plan option and follow the instructions to set up your plan. Get more info here.
For more help with Self Assessment Tax or any other help for Business Owners and Self Employed people, get in touch with Hubu Accountants Wales to see what we can do for you. Contact us through our website or call us on 0800 206 2625 and we’ll be happy to help!