Can’t pay your Self Assessment bill?
Not being able to pay is a different problem from not filing. Deal with both separately, in the right order, and the cost of being late can be kept down.
Applies to: UK-wide
What to do now
- File your return by the deadline, even if you cannot pay.
- Set up a Time to Pay arrangement before the first penalty date.
- If your income has fallen, ask HMRC about reducing your payments on account.
File first, even if you cannot pay
Filing and paying are separate obligations with separate penalties. A late return costs £100 straight away, then £10 a day after three months (up to £900), then further penalties of 5% of the tax due or £300, whichever is more, at six and twelve months. Filing on time avoids all of that, and if HMRC has estimated your tax, filing replaces the estimate with the real figure.
What paying late costs
| When | What is added |
|---|---|
| From the due date | Interest, at the Bank of England base rate plus 4% |
| 30 days late | 5% of the tax unpaid |
| 6 months late | A further 5% |
| 12 months late | A further 5% |
If a Time to Pay arrangement covering the tax is agreed before a penalty date and you keep to it, that late payment penalty is not charged. Interest still runs. Penalties must be paid within 30 days of the notice, and you can appeal one if you had a reasonable excuse.
New penalty rules are coming in
People who must use Making Tax Digital for Income Tax come under a new penalty system from the tax year they join, and from April 2027 the new penalties apply to everyone filing a personal Self Assessment return. Under the new system there is no penalty for the first 15 days; a percentage penalty is charged from day 16 and again from day 31, plus a further daily charge after that. Contacting HMRC early and keeping to an agreed plan pauses those penalties. GOV.UK: Making Tax Digital penalties.
Ways to spread the cost
- A payment plan — online if you owe £30,000 or less, your returns are up to date and you have no other tax debts or plans; otherwise by phone on 0300 200 3820. Time to Pay explained.
- Through your tax code — if you are also employed or get a pension through PAYE, owe less than £3,000, and filed online by 30 December (or on paper by 31 October), HMRC can collect it over the next tax year. You cannot make a part payment to get under £3,000.
- A Budget Payment Plan — regular payments towards your next bill before it is due, if you are up to date.
- Lower payments on account — if you expect your income to be lower this year, you can ask HMRC to reduce them. If you reduce them too far, you pay interest on the difference.
Fitting it in with other debts
HMRC has stronger collection powers than banks and card lenders, so tax should be treated as a priority debt. Budget for your plan, and for next year’s tax, before non-priority creditors. If you cannot afford a realistic plan, a free debt adviser can look at the whole picture. Bill Prioritiser.
You never have to pay for debt advice. MoneyHelper (government-backed), StepChange, National Debtline and Citizens Advice all give free, confidential advice with no obligation.
Common questions
What happens if I miss the 31 January payment deadline?
Interest is charged from the due date, and a 5% penalty is added if the tax is still unpaid after 30 days, with further 5% penalties at 6 and 12 months. A payment plan agreed before a penalty date and kept to avoids that penalty.
Should I file my tax return if I can't pay?
Yes. Late filing penalties are separate from late payment penalties, so filing on time avoids them even if you cannot pay yet.
Can I pay my Self Assessment through my tax code?
If you owe less than £3,000, already pay tax through PAYE, and filed online by 30 December or on paper by 31 October, HMRC can collect it through your tax code over 12 months.