- Apr 11
- 5 min read

Pay Your Tax in Instalments: How to Spread Out Your Tax Bill

Updated: Apr 12

Would you prefer to pay your Self-Assessment Tax Bill in instalments, rather than in one lump sum to HMRC on the 31st January? Well that's absolutely possible and we'll tell you how you can do it, and how to manage your payments and

pay your tax in instalments.

Generally, those individuals who are required to submit a Self-Assessment Tax Return, will complete this, or hire an Accountant to complete their Tax Return, from the 6th April 2024. If the SA302 Tax Calculation states that the individual has a liability of income tax, and possibly national insurance too, this is due to be paid to HM Revenue and Customs (HMRC) by midnight of 31st January following the end of the Tax year.

For example, taxpayers must pay the Self-Assessment Tax Bill for the 2023/24 Tax Return by the due date 31st January 2025.

If the thought of pulling out a large sum to HMRC on January 31st doesn't resonate with you, you are not alone. Many individuals prefer the flexibility and convenience of spreading out their Tax bill, and we're here to tell you how to do so.

Budget Payment Plan with HMRC:

When it comes to managing your Tax payments, one way to go about paying your Tax in instalments is by setting up a budget payment plan with HMRC, it can be a game-changer.

This arrangement allows you to break down your Tax bill into regular, manageable payments towards your Tax bill spread throughout the year, rather than dealing with the stress of one lump sum payment on the deadline.

By opting for this method, you'd be taking proactive steps to alleviate the pressure of a single lump sum payment on January 31st. Instead, you can breathe a little easier, knowing that you're chipping away at your Tax liability bit by bit.

One advantage of paying your Tax in instalments, is that you're also managing your cash flow more effectively, maintaining financial stability and avoiding any unexpected strains on your finances if anything was to arise that would cause you not being able to pay your Tax bill by the deadline. A practical approach empowers you to stay on top of your Tax obligations without feeling overwhelmed.

Voluntary Payments:

Did you know that you can also make voluntary payments towards your Self-Assessment Tax bill at any time?

Rather than setting up an official arrangement with HMRC, you can make voluntary payments directly to HMRC at any time before the deadline. While the idea of parting ways with "spare cash" may not seem appealing to you at the time, consider the long-term benefits. It could be £10 one month and £200 the next, you're completely in control when it comes to making voluntary payments throughout the window between filing your Self-Assessment Tax Return, and the deadline on January 31st.

By proactively reducing your Tax liability throughout the year, you are not just saving yourself time and stress when it comes to the deadline, you are also maximising your financial efficiency. You could even think of it as an investment in your peace of mind. Every voluntary payment you make towards your Tax bill, brings you one step closer to efficient cash flow management, without pulling out that one lump sum in January.

So, the next time that you find yourself with some "spare cash", perhaps you should consider putting some towards your outstanding Tax bill. Paying off in the long run, both strategically and for your well-being, will be beneficial.

Assistance In Managing your Tax Bill:

Navigating the world of Tax payments can feel overwhelming at times, but with the support of a knowledgeable accountant, you can navigate it with confidence.

At Ultra Tax Ltd, we're committed to providing you with the guidance and expertise you need to make informed financial decisions. Our team are here to help you understand your options and choose the best approach for your situation. Whether you've been completing Self-Assessment Tax Returns for years, or completely new to the process, we will work with you every step of the way to ensure that you are meeting your Tax obligations, while optimising your financial strategy.

So, why face the stress and uncertainty alone, when you can have a team of experts by your side? Let us handle the calculations and the details, keeping you informed and stress-free.

Taxes are inevitable, but the manner in which we pay them can significantly impact our financial well-being.

Here are the main advantages to spreading out your Tax bill:

Cash Flow Management

By opting to split your Tax up into multiple payments, you're managing your cash flow effectively. What we mean by this, is that rather than paying an example of a Self-Assessment Tax Bill of £900 on 31st January, you could make 10 payments of £90 per month, which means you're pulling out a small amount each month, rather than a lump sum in one month, which could cause you multiple issues.

Alleviated Financial Strain

An issue you could be putting yourself into, if you pay your Self-Assessment Tax bill in one payment, is financial strain for a certain time period. If your a self-employed beautician, and have rent and rates to pay each month for your salon, and can only pay either your Tax bill or your overheads, you're going to end up extremely stressed. This is why we always advise clients to spread out their Tax bills into multiple payments over the year.

Cash Flow Management Pay Your Tax in Instalments

Avoiding Late Payment Penalties

Yeah you read that right, you don't just receive penalties from HMRC for not submitting your Self-Assessment Tax Return on time, but you are also penalised if your Tax is not paid on time. Now, you don't want your liability to increase via late payment penalties and interest accruing, do you? Plan in advance and pay your Self-Assessment Tax liability in instalments to avoid these repercussions.

If you would like to discuss your unique situation with an expert in the field, you can contact us today via phone call, email or our online chat service, our team are happy to assess your situation and figure out the best option for you at any point.

We don't charge for consultations or additional phone calls after that, we believe that general Accountancy and Tax advice should come free to all individuals, we didn't go through years of training and education for nothing, but we're happy to share tips and knowledge with you to provide the best customer satisfaction to you all.

So get in touch with our friendly team today, and let's discuss how you can pay your Tax in instalments in the most manageable and beneficial way possible.