HMRC Time to Pay 2026: How Gig Workers Can Spread Their Self Assessment Tax Bill
If you cannot pay your Self Assessment tax bill in full by 31 January, HMRC's Time to Pay scheme lets you spread the cost over monthly direct debit instalments — typically up to 12 months. You can set it up online in minutes if you owe £30,000 or less and are within 60 days of the deadline. Interest applies, but penalties are paused while the arrangement is active.
Key Takeaways
- Debts up to £30,000 — set up online via Government Gateway, no phone call needed
- Debts over £30,000 — call HMRC on 0300 200 3822
- Must be within 60 days of the payment deadline to use online service
- Interest accrues at Bank of England base rate + 2.5% — currently around 7.25%
- Late payment penalties are suspended while you stick to the plan
- Missing a payment cancels the arrangement — contact HMRC immediately if you cannot pay
- Does not affect your credit score — HMRC does not report to credit agencies
Contents
What Is HMRC Time to Pay?
Time to Pay is a formal arrangement with HMRC that allows self-employed workers — including gig economy drivers and freelancers — to pay an overdue or upcoming tax bill in monthly instalments rather than a single lump sum.
For gig workers, income is often irregular. A strong December followed by a slow January can make the 31 January Self Assessment deadline particularly difficult. Time to Pay exists precisely for this situation — it is not a last resort for people in serious financial difficulty, it is a standard HMRC service used by hundreds of thousands of self-employed workers every year.
"If you cannot pay your Self Assessment tax bill in full, you may be able to set up a payment plan online. You must owe £30,000 or less and have no other payment plans or debts with HMRC."
— GOV.UK: If you cannot pay your tax bill on time
Time to Pay covers your Self Assessment income tax, Class 4 National Insurance, and any payments on account included in your bill. It does not cover VAT separately — VAT has its own payment deferral process.
Do You Qualify for HMRC Time to Pay?
You can use the online Time to Pay service if you meet all four conditions: you owe £30,000 or less, you are within 60 days of the payment deadline, you have no other HMRC debts, and you have no existing payment plans with HMRC.
| Condition | Online Service | Phone (0300 200 3822) |
|---|---|---|
| Debt up to £30,000 | ✅ Yes | ✅ Yes |
| Debt over £30,000 | ❌ No | ✅ Yes |
| Within 60 days of deadline | ✅ Yes | ✅ Yes |
| More than 60 days overdue | ❌ No | ✅ Yes |
| Existing HMRC debt | ❌ No | ✅ Yes |
| No HMRC debts or plans | ✅ Best route | ✅ Yes |
What If You Do Not Qualify for Online?
Call the HMRC Self Assessment payment helpline on 0300 200 3822 (Monday to Friday, 8am to 6pm). Have your UTR number, National Insurance number, and a rough idea of what you can afford monthly ready before you call. HMRC will assess your income and outgoings to agree a realistic plan.
How to Set Up an HMRC Time to Pay Arrangement
The online process takes around 10 minutes. You log in to your HMRC Government Gateway account, navigate to your Self Assessment balance, and follow the prompts to choose your monthly payment amount and start date.
Log in to Government Gateway
Go to gov.uk/log-in-file-self-assessment-tax-return and sign in with your Government Gateway user ID and password.
Check your Self Assessment balance
Under "Payments and liabilities", you will see your outstanding balance. Confirm the amount you owe before proceeding.
Select "Set up a payment plan"
HMRC will ask whether you can pay any upfront amount. Paying something upfront reduces the monthly instalments and the total interest charged.
Choose your monthly amount
HMRC will suggest a payment schedule. You can adjust the monthly amount — a higher monthly payment means fewer months and less interest. The minimum plan HMRC will accept is typically 2 months.
Set up a direct debit
Payments are taken by direct debit on the date you choose each month. You will receive a confirmation email with the full schedule. Keep this for your records.
Important: You must have filed your Self Assessment return before setting up a Time to Pay arrangement. HMRC cannot agree a plan for a bill that has not yet been calculated.
Interest and Penalties During a Time to Pay Arrangement
HMRC charges interest on all tax paid after the 31 January deadline — including amounts being paid through a Time to Pay arrangement. However, the late payment penalty of 5% (charged 30 days after the deadline) is suspended for the duration of a valid arrangement.
| Charge | Without Time to Pay | With Time to Pay |
|---|---|---|
| Interest (daily) | BoE base + 2.5% | BoE base + 2.5% — same |
| 30-day penalty (5%) | Charged after 30 days | Suspended |
| 6-month penalty (5%) | Charged after 6 months | Suspended |
| 12-month penalty (5%) | Charged after 12 months | Suspended |
| Credit score impact | Possible if enforcement | None |
For a gig worker owing £3,000 spread over 12 months, the total interest cost at current rates would be approximately £109 — roughly £9 per month on top of your instalments. That is a modest cost to avoid a 5% penalty of £150.
What Happens If You Miss a Payment?
Missing a Time to Pay instalment without contacting HMRC first will cause the arrangement to be cancelled. The full remaining balance immediately becomes due, and HMRC will reinstate penalties from the original deadline date.
- Contact HMRC before you miss a payment — call 0300 200 3822 and explain the situation
- HMRC can adjust the plan — reduce the monthly amount, extend the term, or pause for one month
- If the arrangement is cancelled, you can apply for a new one but HMRC may be less flexible
- Repeated failures can lead to HMRC pursuing enforcement — including county court judgements
- Keep HMRC updated if your income changes — they can revise the plan up or down
Time to Pay Tips for Gig Workers
Set aside tax monthly — not annually
The best way to avoid needing Time to Pay is to set aside 25–30% of every payment you receive from Deliveroo, Uber Eats, Amazon Flex or any other platform into a separate account. Use our gig worker tax calculator to estimate your quarterly liability.
Apply early — not on 31 January
You can contact HMRC about Time to Pay before the deadline if you already know you will not be able to pay in full. Setting up a plan in advance avoids the initial 30-day penalty entirely.
Pay as much upfront as you can
Even a partial upfront payment of £500 on a £2,000 bill reduces your interest significantly and demonstrates good faith to HMRC, which helps if you ever need to renegotiate the plan.
Use HMRC's Budget Payment Plan for future years
Once your current bill is cleared, consider using HMRC's Budget Payment Plan — a voluntary advance payment service that lets you pay your estimated future tax bill in weekly or monthly amounts throughout the year, so you never face a January lump sum again.
Frequently Asked Questions
What is HMRC Time to Pay?
HMRC Time to Pay is a formal arrangement that lets self-employed workers spread their Self Assessment tax bill into monthly direct debit payments. You can set it up online if you owe up to £30,000 and are within 60 days of the payment deadline.
How long can I spread my tax bill with HMRC?
HMRC typically allows up to 12 months. The exact length depends on the amount owed and what you can afford monthly. For larger debts agreed by phone, HMRC may allow longer — especially if you can demonstrate genuine financial difficulty.
Does HMRC charge interest on a Time to Pay arrangement?
Yes. Interest accrues at the Bank of England base rate plus 2.5% from the original payment deadline until the debt is cleared. This is unavoidable but is far less costly than the 5% late payment penalties that are suspended during the arrangement.
Can I set up HMRC Time to Pay online?
Yes — if you owe £30,000 or less and are within 60 days of the deadline. Log in to your Government Gateway account and navigate to your Self Assessment balance. For larger debts or if you are further overdue, call 0300 200 3822.
What happens if I miss a payment in my Time to Pay arrangement?
HMRC may cancel the arrangement and the full balance becomes immediately due. Contact HMRC before missing a payment — they will usually adjust the plan rather than cancel it if you communicate proactively.
Will a Time to Pay arrangement affect my credit score?
No. HMRC does not report Time to Pay arrangements to credit reference agencies. Your credit score is unaffected as long as the plan remains active. Only enforcement action — county court judgements — would affect your credit file.
Can I set up Time to Pay before the 31 January deadline?
Yes. If you know you cannot pay in full, contact HMRC before the deadline. Setting up a plan in advance avoids the 30-day late payment penalty of 5% entirely — making early contact the smartest financial decision.
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