You can now set up a budget payment plan that enables you to make weekly or monthly direct debit payments towards your next Self Assessment tax liability. This means that you will have less to pay when you reach the Self Assessment payment deadline.
Most clients pay their tax in January and sometimes July, depending on whether they are also required to make tax payments on account. It can be difficult to manage these payments as they can sometimes be quite substantial. The option of making either weekly or monthly payments can therefor be more attractive to clients as it generally makes cash flow much easier to manage – you are essentially making tax payments as you go rather than once or twice a year.
In order to setup a weekly or monthly payment plan your tax account must be up to date and you must have paid your last tax liability in full. You can set the payment plan up yourself online using your HMRC online account – more information on what you need to do can be found here: Pay your Self Assessment tax bill: Pay weekly or monthly – GOV.UK.
Please be aware that if the amount you have paid does not cover all of your next tax bill you will need to pay the difference by the payment deadline. If you are in credit position you can ask for a repayment.
If your circumstances change you can also pause payments for up to six months if you need to so there is still some flexibility here if you need it.
What can I do if I am behind with my tax payments?
If you have missed the Self Assessment payment deadline and still owe tax for the previous tax year you will not be able to make weekly or monthly tax payments under the this arrangement. Instead you will need to set up a payment plan with HMRC in order to bring your account up to date. This is also known as a ‘Time to Pay’ arrangement. More information on what you need to do in these circumstances can be found here: If you cannot pay your tax bill on time: Setting up a payment plan – GOV.UK.
How can I manage my tax position better?
Paying your tax can sometimes be quite daunting and I always encourage my clients to plan for their tax liabilities – The 2024/25 current tax year ends on the 5th April 2025 and Self Assessment tax payment deadlines are typically the following January and July – in the case of the current 2024/25 tax year the payment deadlines are 31 January 2026 and 31 July 2026. Your 2024/25 Self Assessment tax return can be prepared any time after the 6 April 2025 and I would encourage you to get this done as early as possible as the earlier you do it the sooner you will know what your actual tax position is. Those that complete their tax returns in April 2025 have nine months to save for any tax due, those that complete their tax returns in December have just one month to save for any tax due which is a far more stressful position to find yourself in.
If you need any help with your tax position please do not hesitate to contact me.