HMRC PAYMENT PLANS & MAKING TAX DIGITAL
Posted on 16th February 2022 at 15:08
If you think you might struggle to pay your tax bill you can set up a Budget Payment Plan to make regular monthly or weekly payments.
The amount in your Budget Payment Plan will be used against your next tax bill - this means you’ll have less to pay at the payment deadline. If the amount in your plan does not cover your next bill in full, you’ll need to pay the difference. If you’re in credit, you can request a refund.
When you set up your Budget Payment Plan, you’ll choose how much you want to pay and how often.
You can pause payments for up to 6 months if you need to.
To use the Budget Payment Plan, you must be up to date with your previous Self Assessment payments.
Set up your Budget Payment Plan
Go to your HM Revenue and Customs (HMRC) online account and set up a Direct Debit. Choose the Budget Payment Plan option and follow the instructions to set up your plan.
Making Tax Digital - what you need to know and do
Making Tax Digital for Income Tax (MTD) rules apply to you if you’re registered for Income Tax Self Assessment and have a qualifying income of more than £10,000. If you meet these criteria, from 6 April 2024 you’ll need to use MTD compatible software to:
keep records of your business income and expenses in a digital format
send quarterly updates of your business income and expenses to HMRC
finalise your business income and submit your final declaration
Now is the time to start setting this up for your business if you haven't already. Sign up here.
What are the benefits to you?
Keeping accurate and up-to-date accounting records is not something many business owners enjoy, partly because it takes so much time, especially if it has been accumulating for a few months. Going digital may seem daunting if you have been used to doing things manually but it needn't worry you. There are many advantages to the new system, here are a few of them:
No more boxes of receipts, everything is stored online.
It will be the software company's liability to keep the records, not yours.
No more sorting out all your receipts to input them into date order, that is done for you as you add them.
You connect your bank account so you can have a real-time cash flow monitor.
Manual data entry mistakes are avoided.
Reporting options mean you can plan your business finances and see what is going on at a glance.
Quarterly submission to HMRC keeps you on track and stops any nasty surprises.
It gives you more control of your finances and business.
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