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Brian Redford, Director of HM Revenue & Customs’ (HMRC's) Agents and Employers Service Improvement Team (AESIT), explains the benefits of HMRC’s Budget Payment Plan.

Introduction to the Budget Payment Plan

This time of year is all about countdowns – retailers and the media seem to start counting down the number of days to Christmas earlier and earlier. On top of that there’s the countdown until the deadline for filing tax returns online. From the end of October there are just three months to go until the 31 January cut-off.

We know that, for a lot of people, this can be an expensive time of the year. To help people spread the cost of paying tax over a period of time, rather than in one hit, HMRC has set up a flexible Budget Payment Plan. This means you can set up regular payments by direct debit right now.

How the Budget Payment Plan can Help

The Budget Payment Plan is available to everyone who wants to make payment of their future self assessment liability and whose current payments are up to date. The scheme takes away the stress involved with finding a large sum of money by 31 January 2010. You decide your own weekly or monthly payment amount by direct debit, which is a well proven and secure method of making payments. It only takes a few minutes to go online and set up a Direct Debit Instruction and payment plan. As well as spreading the cost out, this avoids the need to write cheques and pay postage.

An important element of the scheme is flexibility - people can take a break at any time and suspend payment for up to six months, or just cancel completely.

As well as the Budget Payment Plan, self assessment customers can set up a single payment. If you have a payment to make on 31 January you can set that up now for collection on or before 31 January. The Direct Debit Instruction you set up can also be used to pay another eight types of taxes and duties.

What Do I Need to Do to Set Up a Budget Payment Plan?

To learn more, visit HM Revenue & Customs and click on “Paying HMRC” in the “Quick Links” box, select “Self Assessment” and then click on “Paying by Budget Payment Plan”. [ Or just click on the link Paying Self Assessment by Budget Payment Plan ].

For those who already use HMRC’s online service and wish to set up a direct debit payment, it’s as simple as logging in to Self Assessment Online, selecting “direct debit payment” from the main menu and following the on-screen links. Make sure you have to hand your bank or building society account number and sort code, your 11-character taxpayer payment reference - your 10-digit Unique Taxpayer Reference (UTR) followed by a K - and details of how much you want to pay and when. It’s that easy and puts you in control of your tax payments.
           
For anyone who hasn’t used Self Assessment online before, you will need to register for online services. This is a very easy process - just visit HM Revenue & Customs and click on the self assessment link in the “do it online” menu. You will be given immediate access to direct debit online and we will send you an activation PIN through the post a few days later. You’ll need to activate the PIN within 28 days, otherwise access will be switched off to make sure your account remains secure.

All payments made under the Budget Payment Plan go towards your overall tax bill - which normally needs to be paid in full on 31 January (and 31 July if you make payments on account). You can view your account online.

Drive towards Improved Customer Service

HMRC has developed the Budget Payment Plan as part of our improved customer services. It gives you greater control of your finances by giving you certainty over what you are paying when, as well as letting you spread the cost over a longer period.