HMRC counts 100,000 online Time to Pay users, ahead of April 1st cut-off

Time to Pay from HMRC has received a clean bill of health, ahead of the deadline for self-assessors to use TTP if they haven’t paid last month’s tax bill, and don’t want to be penalised, falling due.

In fact, in advance of the April 1^st cut-off for the self-employed to set up extra time to pay their January 31^st’s liabilities, WTT Consulting said generally, HMRC was being “flexible” with TPP.

The Revenue’s own figures appear to chime with the tax dispute firm’s characterisation of Time To Pay to FreelanceUK -- at least to the extent that a new online ‘self-serve’ TTP isn’t struggling with adoption.

'Cannot pay'

Indeed, last week, the one-hundred-thousandth taxpayer since April 2021 to use online TTP – which self-assessment customers can set up after filing their 2020/21 tax return, was officially counted.

Taxpayers don’t even need to speak to HMRC to use the service.

It is available on debts of no more than £30,000, and it offers self-assessors “who cannot pay your tax bill” in full, an additional 12 months -- at the very most – to pay the taxman.

'Sooner you file, the more time to agree Time To Pay'

Addressing self-assessors, Victoria Todd, head of the Low Incomes Tax Reform Group said: “If you have not filed your tax return yet, even if there is no tax due or you are able to settle the amount you owe on or before April 1st 2022, we strongly suggest you get your tax return submitted now.

“Filing your tax return is also necessary if you wish to set up a payment plan with HMRC. The sooner the tax return is filed, the more time you will have to agree a payment plan without incurring a penalty if you anticipate that you cannot pay your tax liability in full by 1 April 2022.” 

At the time of writing, the average length of all HMRC’s self-assessment TTP arrangements is currently around 14 months.

But indicating that the online maximum of 12 months extra to pay HMRC is sufficient for many, the average length of TTP agreement via the ‘self-serve’ is currently around only eight months.

'Reluctant'

However Tom Wallace, WTT’s director of tax investigations says that for freelancers in receipt of Accelerated Payment Notices, HMRC is “reluctant” to grant TTP agreements that exceed 12 months.

A former tax inspector, Mr Wallace said any associated dealings he has with the Revenue’s debt management unit tend to be “difficult,” as the unit’s officials offer “very little flexibility.”

“[But] in general, HMRC have been flexible in time to pay for loan charge and disguised remuneration settlements. [That said] their parameters are unclear, and we do still see some inconsistency.”

'Inconsistency'

Some of that "inconsistency" may be down to the length of TTP arrangements being based on affordability, meaning HMRC tailors the timetables to the circumstances of each individual.

So outside of the specific options which exist for taxpayers with loan charge debts (unlike SEISS customers for whom TPP rules are the same as for general customers), the Revenue sets agreements on how much a person can pay.

And pay on a regular basis – and for how long.

'Treated different'

Yet WTT’s Mr Wallace says it is “certain debts” which get “treated different” by HMRC, in terms of it granting time to pay terms, and he believes the “parameters they are working to” should be more transparent.

Asked by FreelanceUK if a full-time employee earning £50,000 a year with no debts other than those in a side-hustle business and debts which could be cleared using the salary, would or would not be eligible for TTP, a HMRC spokesperson declined to be drawn.

The HMRC spokesperson would only say: “We understand some customers might be worrying about paying their Self-Assessment bill this year, and we want to support them. To see if you’re eligible to set up a payment plan, go to GOV.UK and search ‘pay my Self-Assessment.’”