The deadline of 31 January is fast approaching for all Self-Assessment personal tax returns to be submitted and paid to HMRC. This can be a stressful time of year, especially if you are someone who leaves payment to the last minute. Luckily, HMRC have multiple payment methods available to you to suit your time frame.

The various ways to pay your tax bill

Have a look through the list below or our useful infographic in order to identify how much time you need to leave for your preferred payment method.

Within two hours

If you want to get it ticked off your list you can pay within two hours by approving a payment through your online bank account. Here are the three steps you need to follow:

Step 1: When you’re ready to pay, start your Self Assessment payment.
Step 2: Select the ‘pay by bank account’ option. This will direct you to sign in to your online or mobile banking account.
Step 3: Approve the payment to ‘HMRC Shipley’ on your online or mobile banking account.

Same or next day

There are a variety of ways that payments can be made that only take a day or so to go through. There are some caveats as there are some circumstances in which they may take longer which are listed below:

• Faster payments, CHAPS (Via online or telephone banking). Be aware that payments from overseas may take longer so check with your bank.
• Using your Debit or Corporate credit card online. However, if you use your corporate card, there will be a non-refundable fee applied.
• At your bank or building society. Please note that this option is only available to those who still receive paper statements from HMRC.

Within three working days

• Bacs (Via online or telephone banking).With this option, payments from overseas may take longer so check with your bank.
• If you’ve set up a Direct Debit to pay your tax annually, this will automatically be paid but takes three working days to clear. It needs to be set up previously for it to be processed within this timeframe.
• If you have a cheque book you can pay with a cheque. You must include the payslip from HMRC if you still receive paper statements.

Within five working days

If you would like to pay by direct debit, but have not used it before, please allow up to five working days for it to be set up.

Here is the information you will need to pay your tax bill

Whichever method you choose to use, you will need your 10 digit unique tax reference (UTR) number. You can find this on any correspondence from HMRC – or if we are your accountants, you can ask us for it. For any bank payments your reference should be your UTR followed by “K”.

Depending on how you pay, you may also require HMRC’s bank details:

Set up a payment plan

In order to minimise the impact of a large tax bill at the end of January each year, it is possible to set up weekly or monthly payments towards your bill to suit your own budget. This means you will only have to pay the difference if your plan does not cover your bill, and can request a refund if you have overpaid.

If you would like to do this, go to your HMRC online account and set up a Direct Debit, this time choosing the Budget Payment Plan option.

You don’t need to use HMRC to create a budget plan, we always recommend putting aside a monthly amount towards your tax bill to ease cash flow when it comes to paying your annual bill. It’s a good habit to get into from the offset.

If you can’t pay your tax bill

Alternatively, if you find you cannot pay your tax bill in full, you may be able to set up a Time to Pay arrangement on your HMRC online account. This allows you to pay off your tax bill in installments, if you:

• Have filed your latest tax return
• Owe £30,000 or less
• Are within 60 days of the payment deadline
• Do not have any other payment plans or debts with HMRC.

If you would like any further advice or support or you’d like to join us please contact us and we will be happy to help.