What to do if you’re rejected for Time to Pay

Lamont Pridmore - Accountants

An estimated 25,000 taxpayers have registered to spread out tax payments this year using the Time to Pay service, HM Revenue & Customs (HMRC) recently revealed.

But what happens when your application gets rejected? In this blog, we’ll explore why you may have been rejected and the other options available.

What is Time to Pay?

When paying your tax bill in one lump sum simply isn’t an option, taxpayers turn to Time to Pay to arrange an affordable payment plan.

In response to the coronavirus pandemic, HM Revenue & Customs (HMRC) increased the threshold for self-serve Time to Pay arrangements from £10,000 to £30,000. You can learn more about Time to Pay here.

Check you are deferring for the correct tax year

You can only use Time to Pay to defer the following liabilities:

  • The balancing income tax payment for 2019/20
  • The second income tax payment on account for 2019/20 – if deferred from July 2020
  • First income tax payment on account for 2020/21 – approximately half of total 2019/20 liability
  • Any capital gains tax for 2019/20; and
  • Class 2 and 4 National Insurance Contributions (NICs) for 2019/20.

Check you meet the eligibility criteria

To be eligible, the taxpayer must:

  • Agree to pay the tax monthly within 12 months
  • Have submitted their 2019/20 self-assessment tax return
  • Have no earlier tax returns outstanding
  • Their tax debt must be at least £32 and not exceed £30,000; and
  • They have no other tax instalment plans in place.

Other reasons why you might have been rejected

If you have only recently submitted the 2019/20 tax return, please leave at least 72 hours between arranging a payment plan. HMRC is reporting that there is currently a lag between submission of the return and processing.

HMRC has also reported problems automatically processing returns that include claims for the transferable marriage allowance or entrepreneurs’ relief. Therefore, the manual processing of these claims may take longer than usual.

When all else fails

Speak to HMRC directly or have your tax agent correspond on your behalf. HMRC officials may be able to arrange a payment plan for you on a case-by-case basis, even if the total amount of tax exceeds £30,000.

For help and advice with related matters, please get in touch with our personal tax team today.

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