A client cannot pay their Self Assessment bill: the online payment plan, the £30,000 limit and what it costs on a £6,000 bill

A client who cannot find the money for the 31 January 2027 payment may be able to set up an HMRC payment plan online without anyone from the practice phoning HMRC. The service on GOV.UK says the client must be up to date with their tax returns, owe £30,000 or less, have no other tax debts and have no other HMRC payment plans set up. Payments are taken by Direct Debit and carry interest at the Bank of England base rate plus 4% a year.

This guide is for the call a practice gets in the last week of January or the first weeks of February: "I cannot pay it all, what do I do?"

The conditions, one by one

The GOV.UK service page lists these conditions for the online route:

• Returns up to date. A client whose 2025 to 2026 return is not filed cannot use it. Our guide to the 30 December filing date for tax coded through PAYE matters here, as does getting the return in first.
• £30,000 or less owed. The same page sets this limit. The October 2020 GOV.UK announcement that raised the threshold gave a lower end of £32.
• No other tax debts. A client who also owes, say, an earlier VAT bill or a PAYE bill is outside the online route.
• No other HMRC payment plans. One plan at a time.
• A Direct Debit the client can authorise alone. They must be named on the UK bank account and able to authorise it without a signature from another account holder. A joint account that needs two signatures does not work.

The page also says the client must keep up with payments, or HMRC "could ask you to pay in full".

A client who owes more than £30,000, or who fails a condition, is not out of options, but it is a call or a phone appointment with HMRC, and HMRC will check whether the plan is affordable. GOV.UK says that if a plan cannot be agreed, HMRC will ask for the whole amount.

The window: 60 days, and what the clock includes

The 2020 GOV.UK press release says the plan "needs to be set up no later than 60 days after the due date of a debt", and that it can run up to a 12-month period. That is the only published statement we found for those two limits. The live service page we read does not repeat the 60-day or the 12-month figures, so ask the client to try it early, and treat our dates as a planning guide, not a promise.

For a balancing payment due on 31 January 2027, day 60 is 1 April 2027. Day 30 is 2 March 2027, and that is when the first late payment penalty of 5% of the unpaid tax arrives, according to GOV.UK's penalties page. Further 5% penalties follow at 6 months and 12 months, and interest is charged on the amount owed. Those scales are worked in our Self Assessment late filing and late payment penalty calculator.

We could not confirm from GOV.UK whether setting up a plan before day 30 stops that 5% penalty. Do not tell a client it does. Tell them to set up the plan as early as they can and to ask HMRC directly what happens to the penalty.

What a plan costs: a £6,000 bill over twelve months

The interest is the cost people forget. A plan spreads the payment; it does not freeze the interest. Interest runs from the original due date at 7.75%, which is base rate of 3.75% plus 4%, on the part still unpaid. The rate was 7.75% on HMRC's rates page when we read it on 5 October 2026, and it will move if the Bank of England moves.

Our working: a client owes £6,000 on 31 January 2027, does nothing until a plan starts on 28 February, then pays £500 on the 28th of each month for twelve months. Interest each month is the balance at the time times 7.75% times the days to the next payment, divided by 365. This is our own simple calculation on a set pattern, not HMRC's computation; HMRC's figures can differ by pennies or more.

For the £6,000 bill, the interest is £285.79, which is 4.8% of the tax. By comparison, a 5% penalty on £6,000 is £300, so a client who lets the bill sit past 2 March pays a penalty about as big as a whole year of plan interest, before the 6-month and 12-month penalties arrive.

The payment on account that follows

A client with a £6,000 balancing payment often has a first payment on account for the next year due on the same 31 January, and a second on 31 July. The plan covers the debt that exists when it is set up. It does not make the 31 July payment disappear, and a plan that is not complete by then is another bill on top. If the client expects lower income, the payments on account and SA303 guide covers when it is safe to reduce them.

What to do on the call

1. Ask what is owed, and whether any other tax is overdue. Any other tax debt rules out the online route.
2. Check the return is filed. If not, file it first.
3. Ask whether the client can authorise a Direct Debit alone on their own UK account.
4. Agree the monthly amount the client can sustain for the full term. A plan that fails brings the full demand back.
5. Tell them the interest figure: for £6,000 over 12 months our working says £285.79 at today's rate.
6. Diarise 2 March and 1 April 2027 as the dates to chase if nothing has been set up.
7. Note the advice in the file, in writing, in the same place as the engagement letter's list of responsibilities. A client who ignores the call is a client the which-penalty questions will meet next, and a penalty notice starts the 30-day appeal clock.

Overlyft can set up an AI assistant that watches the client list for unpaid balances from 1 February, drafts the "can you pay this" email with that client's own figures, and puts the day 30 and day 60 dates on a manager's task list for approval.

This is general information, not legal advice or tax advice, and the client's own position should be checked with HMRC.