Filing your tax return is only half of the story. The majority of people filing tax returns will also have a tax liability to pay as well. Not all of those will have set aside funds to cover this, leaving them unable to pay the bill promptly. 

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The first port of call for anyone unable to pay on time should be HMRC’s Payment Support Service. Provided you can demonstrate that you are unable to pay immediately, they will agree a payment plan to clear the amount owed. Payments under a payment plan will be treated as paid on time for the purpose of late payment penalties, though interest will still be charged. If you do agree a payment plan, you must ensure you keep up the agreed payment schedule. Failure to do so will result in HMRC reverting to their normal collection process. The Payment Support Service can be reached on 0300 200 3835.

If you do not agree a payment plan then HMRC have a variety of enforcement options open to them. These include:

• Amending your PAYE tax code to collect the amount due from wages or pension income. 

• Passing the debt to debt collection companies

• Pursuing the debt through the courts

• Making a bankruptcy petition against you.

HMRC also have a power called Direct Recovery of Debts. Provided certain criteria are met, this allows them to collect directly from taxpayers bank accounts. This is a last resort power where a taxpayer who owes at least £1,000 has refused to pay what they owe, even after a face-to-face discussion with an HMRC officer. Even after these hurdles are met, HMRC have to leave a minimum of £5,000 in the taxpayer’s accounts to enable them to cover their immediate living costs. 


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