Freelancers who owe January’s tax can still duck fines, if they act today

Sole traders who leave it until the very last day to set up a payment plan to pay January’s tax bill without incurring a penalty – that’s today -- won’t be disadvantaged for their late action.

'Sooner rather than later'

Advisers to freelancers and the self-employed have long-warned that contacting HMRC “sooner rather than later” to set up a Time To Pay arrangement is best.

But while sensible to avoid penalties, and the amount of statutory late payment interest due accruing, such alerts could deter freelancers from setting up a TTP today -- the deadline.

In fact, Friday April 1st 2022 is the final day to set up a payment plan to pay tax due from any outstanding 2020/21 tax return and not receive a late payment penalty, HMRC says.

'No less flexible'

And the tax authority has clarified to FreelanceUK that going forward to its officials for TTP on April 1st is no different to going forward for TTP on March 1st.

So the arrangement won’t be any less flexible just because it’s the 11th hour, whether freelancers use HMRC’s online TTP service, or phone up (required for £30k+ debt).

Rather, it is the freelancer’s individual circumstances that dictate the sort of timetable which HMRC will agree with them, with a view to achieving a payment schedule that is affordable and sustainable.

'Get your paperwork prepared'

To that end, freelancers are recommended to have their paperwork to hand if phoning up to try to arrange a TTP, such as reference numbers, income details, and expenditure.

Reassuringly for freelancers (whose income can be unpredictable and irregular), HMRC can adjust payment installments up and down, if freelancers report a change in circumstances.   

But because individuals’ situations are so very varied, experts warn that there is no average call length to set up a TTP arrangement with HMRC, and so phone call durations can vary significantly.

'Hanging up'

It might not be the only bit of patience and persistence required by the self-employed if they call up HMRC.

Or at least, that’s the suggestion from a post by a chartered accountancy firm.

Taking to LinkedIn, Evie Thomas, of Steedman Chartered Certified Accountants spoke of HMRC’s “employees hanging up on you with almost every call”.

“I'm afraid to say that this happens to me a lot too,” chipped in Anderson & Edwards tax director James Edwards.


Clearly having had a bad call with an HMRC official for his commercial clients, Mr Edwards reflected, separately: “I just want a bit of pragmatism [from the Revenue].

“Almost £1,000 of penalties when there's [just] £50 of tax [and] National Insurance due? I know that the amount of tax doesn't factor into their own framework, but it seems a bit of a joke.”

Not laughing however is Tom Wallace, who used to inspect for the tax authority.

'Move issues forward'

Now the director of tax investigations at HMRC dispute advisory WTT Consulting, Mr Wallace gave an assessment yesterday that doesn’t bode well for Time To Pay users, even if they do set up an arrangement before tomorrow.

“[Tax officials often] cannot communicate why they have reached a view. [And some even] appear to no longer have the discretion to form their own opinions of how best to move issues forward,” he said.


But the Revenue is keen to help taxpayers move forward on an affordable timetable to pay their January 31st tax bill, although they must fix a Time to Pay today to avoid a penalty, as tomorrow (April 2nd) will be too late.

An HMRC spokesperson said: “We understand some people might be worrying about paying their Self-Assessment bill this year. And we want to support them. To see if you’re eligible go to GOV.UK and search ‘Pay my Self-Assessment.'"


1st April 2022

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