Can't pay your self-assessment tax bill? How an HMRC payment plan works

First, send the return anyway

Not being able to pay is no reason to hold the return back. A late return costs £100 straight away, then more after 3 months, whatever you owe. And until it's in, you don't know the exact bill, so you can't agree a plan to pay it.

The earlier you send it, the more room you have. Sent in the autumn, it tells you the bill months before 31 January 2027, and you can set up a plan before anything is late.

Setting up a payment plan

HMRC calls it a payment plan, or a Time to Pay arrangement. You pay what you owe in monthly instalments by Direct Debit, and HMRC checks the plan is one you can afford.

Start with HMRC's checker, which tells you whether you can set it up online. To do that you'll need:

your Unique Taxpayer Reference (UTR), which is on letters from HMRC
your UK bank details, for an account you're allowed to set up a Direct Debit on
what you earn and what you spend each month

If you can't set it up online, contact HMRC's payment problems line. They'll ask whether you can pay in full, how much you can pay each month, whether you owe any other taxes, and what you earn, spend and have in savings.

How much HMRC will ask for

HMRC looks at what you have left each month after rent or mortgage, food, utility bills and fixed outgoings such as subscriptions. It usually asks for about half of that towards the tax.

There's no time limit. The plan lasts as long as it takes at an amount you can afford. You can ask to make it longer or shorter later.
Paying more is cheaper. Interest runs on whatever is unpaid, so clearing it sooner costs less overall.
Savings count. HMRC expects you to use savings or assets to bring the debt down first. A pension pot isn't counted.
Debt advice helps. If a debt adviser has done you a Standard Financial Statement, HMRC accepts it as evidence of your income and spending.

What it saves you

Without a plan, paying late adds a penalty of 5% of the unpaid tax once it's 30 days late, another at 6 months and another at 12 months. If you ask HMRC to let you pay later before a penalty is due, and they agree, that penalty isn't charged while you keep to the plan.

Interest isn't stopped. It's charged on the unpaid tax from the day after the deadline, at 7.75% a year since 9 January 2026. Our late penalty calculator shows what you'd pay with and without a plan.

If things change

Tell HMRC if your income or spending changes in a way that affects the plan. If you miss a payment, HMRC will contact you to find out why and will try to rearrange the plan with you. If a new tax bill arrives that you can't pay, you may be able to add it to the plan.

If you don't contact HMRC

HMRC will try letters, texts and sometimes visits. If you don't respond or can't agree a plan, it can:

pass the debt to a debt collection agency
take what you owe from your wages or pension
in England, Wales and Northern Ireland, take things you own and sell them, or take money from your bank or building society account
take you to court, or make you bankrupt

HMRC tells you before it does any of these, and costs such as auction fees are added to the debt. Getting in touch early is almost always cheaper.

Free debt advice

If tax is one of several debts, free advice helps you decide what to pay first. In England and Wales, try MoneyHelper; in Scotland, Scotland Debt Solutions; in Northern Ireland, Advice NI.

Making next January easier

A Budget Payment Plan. Once you're up to date, you can pay weekly or monthly by Direct Debit towards your next bill, so there's less to find in January. You can pause the payments for up to 6 months.
Payments on account. If your income has dropped, you can ask HMRC to reduce them. See how payments on account work.
Put tax aside as you're paid. Our tax set-aside calculator turns your profit into a monthly amount to keep back.

If you're in Making Tax Digital

Late payment penalties change from the first tax year you're in MTD. In that first year you have 30 days from the deadline to pay in full or contact HMRC to set up a plan before any penalty. After that it's 15 days. A plan agreed and kept to pauses the penalties from the day you contacted HMRC. How Making Tax Digital works

Common questions

Will a payment plan stop the penalties?

The late payment penalties, yes, if you ask for the plan before the first one is due, 30 days after the deadline, and keep up the payments. Interest is still charged. A plan does nothing about late filing penalties, so send the return on time.

Can I set up a plan before the bill is due?

Yes. Sending your return early tells you the bill in time to set up a plan before 31 January 2027, which is the surest way to avoid late payment penalties.

Do I have to tell HMRC about my savings?

Yes. HMRC asks about savings and investments and expects you to use them to bring the debt down as far as you can. Money in a pension pot doesn't count as savings.

What if I miss a payment?

HMRC will contact you to find out why and, where it can, rearrange the plan. If you can see a missed payment coming, contact them before it happens.

What if another tax bill comes in while I'm on a plan?

Contact HMRC. You may be able to add the new bill to the plan you already have.

More guides

Sources

If you cannot pay your tax bill on time, GOV.UK. Checked 29 Oct 2026
Pay your Self Assessment tax bill: pay weekly or monthly, GOV.UK. Checked 29 Oct 2026
Self Assessment tax returns: sending a return, GOV.UK. Checked 29 Oct 2026
Self Assessment tax returns: penalties, GOV.UK. Checked 29 Oct 2026
Penalties for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
Finance Act 2009, schedule 56, paragraph 10: suspension of penalty during an agreement for deferred payment, legislation.gov.uk. Checked 29 Oct 2026

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