How to pay your Self Assessment tax bill

This article was written by FreeAgent’s Content team and our Chief Accountant, Emily Coltman FCA.

Once you’ve filed your Self Assessment tax return, you’ll get a bill from HMRC showing the tax you owe. In this article, we’ll explain the different ways you can pay your tax bill and how long it will take for your payment to reach HMRC.

When do you need to pay?

The payment deadlines for Self Assessment are:

• 31st January for any tax you owe for the previous tax year (known as a balancing payment), plus your first payment on account for the next tax year, if required
• 31st July for your second payment on account

Make sure your payment reaches HMRC by the deadline, as you’ll be charged interest and may have to pay a penalty if your payment is late. The time you’ll need to allow for your payment to reach HMRC depends on how you choose to pay.

How can you pay your tax bill?

There are several different ways to pay your Self Assessment tax bill, including:

• Direct Debit
• online banking
• personal debit card
• corporate debit or credit card
• bank transfer using CHAPS, Faster Payments or Bacs
• in-branch at your bank or building society
• by cheque through the post

How long will it take your payment to reach HMRC?

The amount of time it takes your payment to reach HMRC will vary depending on how you pay, so make sure you give yourself enough time before the deadline. Remember, the deadline is when the money must reach HMRC, not when you must send it.

We’ve summarised the different payment methods and how long it should take for HMRC to receive your payment in the table below:

*This table is based on information provided on the government’s website at time of publication.

What if there’s a problem with your payment?

HMRC’s online payment services can be slow during busy times, particularly around the Self Assessment payment deadline. HMRC provides an overview of service availability on the government’s website, but the best approach is to make sure you file your tax return and pay your bill ahead of time to allow for any problems that might arise. 

You can check if HMRC has received your payment by checking your online account. If the payment has been received, it should show as paid between three and six working days after you sent it. If you’re paying by post, you can also include a letter with your payment asking HMRC to provide you with a receipt.

Can you pay your tax bill in instalments?

In some instances, it’s possible to pay your Self Assessment tax bill in instalments. How you do this depends on whether you want to make payments against your latest bill or make advance payments against your next bill.

If you cannot afford to pay your Self Assessment tax bill, you can set up a payment plan to spread the cost of your latest bill if all the following apply:

• you owe £30,000 or less
• you do not have any other payment plans or debts with HMRC
• your tax returns are up to date, i.e. you have filed all returns that are due
• it’s less than 60 days after the payment deadline

If you want to put aside money to cover your next tax bill, you can set up a budget payment plan. This lets you make weekly or monthly payments towards your next bill. 

You can set up a plan using your HMRC online account by going to the Direct Debit section and choosing the ‘budget payment’ option when filling in a Direct Debit form. You can’t set up a budget payment plan unless you’re up to date with your previous Self Assessment payments.

If the amount in your budget payment plan does not cover your next bill in full, you’ll need to pay the difference by the payment deadline. A budget payment plan is different from a payment on account, which you may still be asked to make twice a year. 

Can you pay your tax bill through PAYE?

It’s possible to pay your Self Assessment bill through your PAYE tax code if the following conditions apply:

• you owe less than £3,000 on your tax bill, and
• you already pay tax through PAYE, for example you’re an employee or you get a company pension, and
• you submitted your paper tax return by 31st October or your online tax return online by 30th December

If you meet all three conditions, HMRC will automatically collect what you owe through your tax code unless you asked them not to on your tax return. If you don’t meet any or all of the conditions, you will not be able to pay this way.

You can’t pay your tax bill through your PAYE tax code if:

• you do not have enough income for HMRC to collect it through PAYE
• you would pay more than 50% of your PAYE income in tax as a result
• you would end up paying more than twice as much tax as you normally do as a result

Self-employed people cannot pay Class 2 National Insurance through their tax code.