How to Pay Self Assessment Tax?

Are you self-employed, a freelancer, or receive income that isn’t taxed through PAYE? You’ll need to know how to pay self-assessment tax to submit a self-assessment tax return. Paying your Self Assessment tax bill is an essential part of meeting your tax obligations. HMRC offers various payment options to make it more manageable.

If you’re a seasoned pro or new to self-assessment, understanding how to pay your tax bill on time and in full is crucial to avoid penalties and interest. In this discussion, we’ll break down the payment process into simple, easy-to-follow steps, covering online, phone, and postal payments. By the end of this discussion, you’ll be confident in knowing how to pay your Self-assessment tax bill. So, let’s get started and take the stress out of paying your tax bill.


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How to Pay Self-Assessment Tax?

If you’re self-employed HMRC will send you a tax bill showing the amount you owe, which you can pay online, by phone, or by post.


Paying Online

1- Visit the HMRC website
2- Enter your 10-digit Unique Taxpayer Reference (UTR) number
3- Follow the prompts to pay by debit or credit card
4- Keep your payment reference number for your records


Paying by Phone

1- Call the HMRC Self Assessment helpline (0300 200 3311)
2- Have your UTR number and payment details ready
3- Follow the automated prompts to make your payment


Paying by Post

1- Send a cheque or postal order with your UTR number written on the back
2- Make payable to ‘HMRC Self Assessment’
3- Include your payment slip or a letter with your name, UTR number, and payment amount
4- Post to the address on your tax bill or to: HMRC Self Assessment, PO Box 14017, Birmingham, B33 8DF


Other Payment Options

1- Bank transfer: use your UTR number as the reference
2- Direct Debit: set up online or by phone
3- Payment on Account: make two payments on account towards your next tax bill


Important Deadlines and Reminders

1- Pay your tax bill by 31 January to avoid penalties and interest
2- Keep records of your payments and tax returns
3- If you’re struggling to pay, contact HMRC to discuss payment plans or relief options


How Long Will it Take your Payment to Reach HMRC?

Here is a detailed breakdown of how long it takes for a payment to reach HMRC in the UK:

Same or Next Day:
1- Faster Payments (online or telephone banking)
3- Debit or corporate credit card online
4- At your bank or building society (you need a paying-in slip from HMRC)

1- If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before (unless you’re paying by Faster Payments or by debit or credit card).
2- Payments from overseas may take longer – check with your bank.


What if There’s a Problem with Your Payment?

The penalty can be 5% of the amount you owe, and interest is charged on the amount, including any penalty. If your payment is incorrect or missing, HMRC will send you a letter telling you how much you owe, including any penalties and interest.

If your payment is returned or fails. For example, if you’ve cancelled your debit card, HMRC will send you a letter. This is to tell you what’s happened and what you need to do next.

To fix the problem, you’ll need to:

1- Make the correct payment as soon as possible
2- Contact HMRC to let them know what’s happened
3- Follow any instructions from HMRC to put things right

It’s important to act quickly to avoid further penalties and interest.


Can you Pay your Tax Bill in instalments?

You can pay your tax bill in instalments, which can help make paying your tax bill more manageable. Then you can set up a payment plan online, by phone, or by post. You can spread your payments over some time. Usually up to 12 months. However, HMRC may consider a longer period in some cases.

You’ll need to work out how much you can afford to pay each month. HMRC will help you calculate this amount, based on your circumstances. If you miss a payment, HMRC will contact you to discuss your options. You may need to pay a penalty, and you’ll still need to make the missed payment. You can change your payment plan if your circumstances change.


Can you Pay your Tax Bill Through PAYE?

You can pay your tax bill through PAYE, but only if you’re employed or receiving a pension. HMRC will adjust your tax code to collect the tax you owe through your PAYE payments. This means that your employer will deduct more tax from your salary or pension to cover the amount you owe.

Here’s how it works:

1- HMRC will send you a letter telling you how much tax you owe
2- They’ll also tell your employer how much extra tax to deduct from your salary or pension
3- Your employer will deduct the extra tax from your salary or pension and pay it to HMRC
4- The tax is then deducted from your salary or pension over some time, usually a year

The time it takes to pay your tax bill through PAYE depends on how much tax you owe and how much extra tax your employer deducts from your salary. HMRC will tell you how long it will take to pay off the tax you owe. If you leave your job or stop receiving a pension, you’ll need to contact HMRC. This is to make alternative arrangements to pay your tax bill.


The Bottom Line

In conclusion, how to pay Self Assessment tax, paying your Self Assessment tax bill in the UK is a straightforward process. This can be done online, by phone, or by post. It’s essential to pay your tax bill on time to avoid penalties and interest, and HMRC offers various payment options. Including paying in instalments or through PAYE. This is to make it more manageable. If you’re struggling to pay, it’s crucial to contact HMRC to discuss your options and avoid further action.

Keeping accurate records and seeking help when needed can make all the difference in ensuring a smooth and stress-free tax payment experience. If you follow the guidelines and options outlined in this discussion, you can confidently navigate the process of paying your Self-assessment tax bill.


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Disclaimer: The information provided on is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.