If you’ve been self-employed for a while you’re probably used to the January and July payments on account. The sensible among you will put away a certain amount for every cheque or invoice paid towards the dreaded tax bill so when the deadline comes round you’re not left with a nasty hole in your finances.
However, you don’t have to wait until the HMRC deadline to pay your bill. Direct debit instalments are also an option with the tax man’s Budget Payment Plan. As long as your tax payments are up to date, you can sign up. It’s totally flexible and you make the decision of how much you want to pay off your tax bill and how often.
You choose your own weekly or monthly amount, and you can take a payment holiday or cancel altogether at any time. You can also set up a direct debit to simply take the full amount from your account if you’d rather not send in a cheque.
Paying by direct debit ensures that you are covered by the Direct Debit Guarantee. To find out more click here.
To use the service you’ll need to register with HMRC for online services at www.hmrc.gov.uk if you haven’t done so already. Once you’re registered log on to Self-Assessment Online and select direct debit payment from the menu. You’ll also need the following to hand: