How Do I Pay My Self Assessment Tax Bill?
There are many different ways to pay the HMRC for your self-employment tax. Here’s what you need to know!
Filing your online tax return is quite the process. But when it comes time to pay income tax, the HMRC makes things simple and complicated at the same time. It’s simple because the bill you are sent clearly outlines the many options to pay.
However, it can be complicated because of the number of different payment methods. All that matters is that you pay the total and pay on time. As a sole trader, you have the responsibility of managing your own self-assessment tax return. That includes fulfilling payment deadlines.
In this guide, we’ll talk about the myriad of ways to pay your self-assessment tax bill.
Here’s What We’ll Cover:
How to Pay Your Self Assessment Tax
There are lots of different ways the HMRC will gladly accept your tax payment. Find the payment method that works best for you:
This is one of the easier ways to pay your taxes. You can use Faster Payments, CHAPS and BACS. Faster Payments are exactly that - fast. They will likely arrive the same day. CHAPS are similar. BACS can take up between 3-4 working days. With this in mind, you may want to ensure you process BACS payments well before the deadline.
To pay via bank transfer, all you need is:
- Your 11 digit reference
- The correct bank transfer details to pay into. HMRC has two accounts (of course they do!). HMRC Shipley and HMRC Cumbernauld. Your self-assessment tax bill will have the correct bank account to send it to.
Note: If you are making your income tax payment from an international bank account, it’s wise to account for longer transfer times. Not only will your bank take longer to process the money, but the receiving bank will delay too. Those delays can mean your tax payment arrives late through no fault of your own.
Debit or Corporate Credit Card
You can use cards if you pay online using the HMRC portal. They will process your card payment instantly.
If you use a personal debit card, there is no extra fee.
If you use a corporate debit card, there is an extra processing fee.
If you use a corporate credit card, there is an extra processing fee.
You cannot use a personal credit card.
At your Bank or Building Society
If you receive your statement from the HMRC in paper form with your tax bill on it, you can pay in person at your bank.
You’ll have to use the paying-in slip that is sent to you via post.
Write that your cheque is payable to ‘HM Revenue and Customs only’.
Then write your 11 digit reference on the back of the cheque.
The HMRC will process your payment from the date you pay it. Not the date the cheque clears (processing time for cheques vary). That said, it’s still worth paying well before the deadline.
To pay via direct debit, you’ll have to set up single payments each time you want to pay.
You’ll need to use your 11 digit reference to make sure your direct debit is recorded correctly.
You can set up the payments online using your HMRC online account.
It can take a few days for the direct debit to be set up so it’s worth doing with plenty of time before the payment deadline. The HMRC advises it can take up to 5 working days to process for the first payment. For subsequent direct debit single payments, it will take around 3 days to process if you use the same payment details.
You can mail a cheque to HMRC. The address is:
There’s no street name or number.
You can use the payslip that the HMRC sends you in the post. Or you can print one from the website.
There are lots of ways to make your self-assessment payment. Not all of them are free and many of them will have some sort of delay. So the major takeaway here is to remember to process your payment as early as possible. A late payment could result in additional charges. If you really can’t make the payment until very close to the deadline, choose one of the faster methods like Faster Payments. If you think you may miss the deadline, reach out to HMRC immediately with your UTR number to discuss your situation. For financial difficulties, they may set up a budget payment plan. Contact them to sort out an adequate payment arrangement.
For more UK tax guides like this one, head to our resource hub!