Tax & admin · 25 January 2018

A handy guide for paying off your tax bill to HMRC

Second bank account
It is important HMRC receives payment as well as self-assessment forms by 31 January

Here, chief FreeAgent accountant, and Business Advice expert, Emily Coltman, provides a useful guide to help self-employed taxpayers pay off their tax bill by HMRC’s deadline.

Wednesday 31 January isn’t just the date by which you have to submit your self-assessment for the 2016/17 tax year to HMRC. It’s also the date by which you have to pay your tax bill – so it’s important to get organised and make sure that your payment reaches HMRC before the midnight deadline.

Here is a handy rundown of the main payment options that HMRC accepts, how long each type of payment takes to process and how you can use each payment method.

Remember, you can no longer submit your self-assessment at the Post Office.

  1. Online or telephone banking (faster payments)

How long it takes for payment to reach HMRC: Same or next day, including weekends and public holidays.

How to payBy using the bank details listed on gov.uk. 

  1. CHAPS

How long it takes for payment to reach HMRC: Same or next day, including weekends and public holidays.

How to pay: By using the bank details listed on gov.uk.

  1. Debit card online

How long it takes for payment to reach HMRC: HMRC will accept your payment on the date you make it, not the date it reaches its account – including on weekends and bank holidays.

How to payBy following the links from your HMRC online account.

  1. Credit card online (1.5 per cent charge)

How long it takes for payment to reach HMRC: HMRC will accept your payment on the date you make it, not the date it reaches their account  including on weekends and bank holidays.

How to payBy following the links from your HMRC online account.

  1. At your bank or building society (only an option if you still get paper statements from HMRC)

How long it takes for payment to reach HMRC: Same day (Monday-Friday only).

How to pay: By paying cash or writing a cheque made payable to “HM Revenue and Customs only” followed by your Unique Taxpayer Reference (UTR), followed by the letter “K”.

  1. Bacs

How long it takes for payment to reach HMRC: Three working days.

How to pay: By using the bank details listed on gov.uk.

  1. Cheque through the post

How long it takes for payment to reach HMRC: Three working days.

How to pay: By writing a cheque made payable to ‘HM Revenue and Customs only’ followed by your Unique Taxpayer Reference (UTR) number. It should be posted along with your paying-in slip to HMRC, Direct, BX5 5BD – no street name, city name or PO Box is required.

  1. Existing Direct Debit

How long it takes for payment to reach HMRC: Three working days.

How to payBy setting up a Direct Debit from your HMRC online account (note that you have to set up a new direct debit every time you wish to make a payment).

  1. New Direct Debit

How long it takes for payment to reach HMRC: Three working days.

How to payBy setting up a Direct Debit from your HMRC online account.

Unique Taxpayer Reference

For payments where a reference is required you will need to use your ten-digit Unique Taxpayer Reference (UTR). Where a payment reference number is asked for you should use your UTR followed by the letter “K”.

Whichever method you plan to use to pay your tax bill this year, if you’re planning to meet the deadline then make sure you file your self-assessment with HMRC in enough time to allow your payment to reach them before the 31 January. Otherwise you will have to pay interest and may even face a penalty, even if you manage to file your tax return on time.

Don’t forget that online payment services may be slow during busy times – you can check online if there are any current problems or times they aren’t available.

Emily Coltman FCA is chief accountant to FreeAgent, which makes award-winning cloud accounting software provider for freelancers, micro-businesses and their accountants

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HMRC warns of scam text messages ahead of self-assessment deadline

Fraudsters alleging to be from HMRC are increasingly using scam text messages to dupe taxpayers, the tax office has warned.

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ABOUT THE EXPERT

Emily Coltman is chief accountant to FreeAgent, provider of cloud accounting software for freelancers, micro businesses and accountants. She is passionate about helping the owners of small and growing businesses to escape their “fear of the numbers” and she translates small business finance and tax into practical common sense speak.

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