Struggling to pay Tax what should you do?

The January self-assessment payment deadline is inconvenient because it falls in a month when many people are already struggling to pay their Christmas credit card bills. Regardless of how unpleasant the 31 January tax deadline is, it should not be ignored.Self-assessment taxpayers must pay any remaining tax due for 2020/21 by midnight on 31 January 2022, as well as any Class 4 and Class 2 National Insurance liabilities for 2022. If their tax and Class 4 National Insurance liability for 2022 was at least £1,000 and less than 80% of their liability was collected at source, such as through Paye, the first payment on account must be made by midnight on January 31, 2022.What can you do if you're having trouble paying your bills?

Make contact with HMRC.

Ignoring the problem will not solve it; rather, it will exacerbate it. If you believe you will be unable to pay what you owe in full by the 31 January 2022 deadline, you should set up a time to pay agreement or contact HMRC as soon as possible, preferably before the 31 January 2022 deadline. However, even if you miss this deadline, you may still be able to set up or agree on an instalment plan.

Instalment payment

Setting up a time-to-pay agreement may allow you to pay what you owe in instalments.

If you have a Government Gateway account, you can do this yourself online if:

1.You have submitted your most recent self-assessment tax return;2.You owe no more than £30,000;3.You are less than 60 days away from the payment deadline; and4.You intend to repay your debts within the next 12 months or less.

If you do not meet all of the requirements listed above, you will be unable to set up an instalment payment plan online. However, you may be able to reach an agreement with HMRC. To do so, contact the Self-Assessment Payment Helpline at 0300 200 3822. The line is open from 8 a.m. to 4 p.m., Monday through Friday. If you are unable to pay another type of tax, such as corporation tax, you should contact HMRC's Payment Support Service at 0300 200 3835. The lines are open from 8 a.m. to 4 p.m., Monday through Friday.Make sure you have the following information on hand when you make the call.

1. your one-of-a-kind taxpayer identification number and National Insurance number;
2. if you are VAT-registered, your VAT registration number;
3. your bank account information; and
4. information on any previous payments you have missed

HMRC will consider how much you can pay in full, your monthly income and outgoings, any savings or investments you have, and how much you can afford to repay each month. If you have any savings or investments, you must use them to pay your tax bill.A time-to-pay agreement has no set length; it will be determined by how much you can afford to pay each month to clear the tax that you owe. Payments are typically made through direct debit, and once the agreement is in place, it is critical that payments are not missed and that future liabilities are paid on time. You may pay more than the agreed-upon amount if you are able to pay off the debt sooner.

If you do not make the payments, or if HMRC refuses to agree to a time-to-pay agreement, you will be required to pay the full amount owed. If you do not do this, HMRC may use their debt collection powers against you.

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