How to pay your HMRC Self Assessment tax

Self Assessment tax returns are a method of paying tax for those that are self-employed, partners in a partnership business, ministers of religion, or trustees and executors of an estate. There are also a number of other reasons you may be responsible for paying your own tax, such as if tax cannot be collected via your PAYE code, so it is important to understand how your tax should be paid before the end of a tax year.

You are required to inform HM Revenue & Customs (HMRC) if you earn an income through any of the above means, which can be done by completing a Self Assessment Tax Return online or on paper. Completing this type of assessment will allow HMRC to determine how much tax is owed on your yearly income and capital gains. You will then be informed of how much you must pay HMRC at the end of the tax year.

Quickbooks’ easy-to-use Self Assessment accounting software allows you to obtain real-time tax estimates for Self Assessment Tax Payments.

You can also calculate, organise, and prepare Making Tax Digital for VAT and Construction Industry Scheme tax returns.  

Different methods of making your Self Assessment payments

There are a number of convenient ways you can pay your Self Assessment Tax Bill. As long as you choose the right method that will allow you to complete your HMRC Self Assessment payments on time and in full, then it is up to you which way best suits you. 

Direct debit

Direct debit is one of the easiest ways to complete your Self Assessment payments. You can set up a direct debit payment through your HMRC online account to make easy monthly payments toward your Self Assessment tax bill.

Make sure to find your 11 character payment reference number before making a direct debit payment to HMRC. This will be your 10 digit Unique Taxpayer Reference followed by the letter ‘K’. You can find this number using your HMRC online account, or on your payslip if you are given paper statements.

You can use direct debit to make Self Assessment monthly payments, as well as one-time payments.

Through your banking app

You can use your mobile or desktop banking app to make your Self Assessment payments online. 

Once you have signed in to your HMRC online account you can select the ‘pay by bank account’ option, which will direct you to your online or mobile banking app to approve a payment to ‘HMRC Shipley’.

Bank or building society

If you still receive paper statements from HMRC, or have obtained a Self Assessment paying-in slip sent to you by HMRC, you can make a payment at your local branch by cash or cheque. 

You will also need an 11 digit reference number to pay by this method. This is your 10 digit Unique Taxpayer Reference followed by the letter ‘K’.

Unfortunately, if you do not have a paying-in slip then you will not be able to pay your Self Assessment tax bill at your bank or building society.

By cheque

The HMRC still accepts Self Assessment Bill payments via cheque, which can take up to 3 working days to reach HMRC.

You can make your cheque payable to ‘HM Revenue and Customs only’, using the following postal address:

HMRC DIRECT BX5 5BD

Make sure to include your 11 character payment reference number on the back of the cheque. If you still receive paper Self Assessment payslips from HMRC, then you should include this with the cheque. Make sure not to fold or staple these together.

Pay in instalments weekly or monthly

Pay weekly and monthly options are also offered by HMRC, which will allow you to make regular payments towards your next tax bill using HMRC’s Budget Payment Plan.

You do not need to pay the full amount of your tax bill using this method, but any amount you have paid using a Budget Payment Plan will be taken off your tax bill total when payment is due. HMRC also offers options to pause payments on your Budget Payment Plan for up to 6 months, which can give you a much needed break if other priority payments come up during this time.

What are the conditions for paying in instalments?

If you find yourself facing a Self Assessment tax bill and the idea of making a lump-sum payment is daunting, you can consider setting up a payment plan. Here are the criteria that need to be met for this option:

• Debt Threshold: To qualify for a payment plan, your outstanding tax liability should be £30,000 or less.

• No existing payment plan: It's essential that you don't have any existing payment plans or debts with HMRC. This condition simplifies the process and ensures that your payment plan is focused solely on your current tax bill.

• Up-to-date tax returns: Your tax returns should be up to date, meaning that you have filed all the returns that are due. 

• Request within 60 days: The request for a payment plan should be made within 60 days after the payment deadline. HMRC provides this window of opportunity for those who need more time to address their tax bill.

Pay through your tax code

Paying your tax payments through your tax code is the simplest and easiest way of making your HMRC Self Assessment payments. HMRC will automatically deduct a percentage of your monthly earnings from your salary or wages, using your PAYE tax code to calculate the amount that you owe. This method of payment is available to anyone who receives their salary or wages through PAYE, provided they meet the following conditions.

• You must owe less than £3000 on your tax bill

• You already pay tax through PAYE

• You have submitted your paper tax return by the 31st of October, or your online tax return by the 30th of December

As long as these conditions are met, HMRC will automatically deduct any tax you owe each time you are paid via PAYE.

How long will each method take?

Note: If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before (unless you’re paying by Faster Payments or by debit or credit card.

FAQs 

What is the best way to pay Self Assessment?

Paying your Self Assessment tax through your tax code is the simplest and most stress-free way to pay. Once this method is set up, HMRC can automatically deduct your tax contributions whenever you receive a payment through PAYE. Provided your tax code is correct, you are unlikely to owe an excess on your Self Assessment Tax payments at the end of the tax year.

When do I need to pay my Self Assessment tax return by?

The deadline for filing your Self Assessment Tax Return is typically January 31st following the end of the tax year. For example, for the tax year ending on April 5th, 2023, the deadline for filing would be January 31st, 2024. It's important to file on time to avoid penalties. 

Can I pay my Self Assessment tax in instalments?

You can pay your Self Assessment Tax by setting up payments on your HMRC online account using the Budget Payment Plan. This type of plan will allow you to set up weekly or monthly payments that contribute towards your next Self Assessment tax bill.

Can I pay my Self Assessment bill at the post office?

You can no longer pay your Self Assessment tax at the Post Office. You can, however, pay your tax at your local bank, provided you obtain a pay-in slip from HMRC.

Found this article about how to pay HMRC Self Assessment tax useful? Using software like QuickBooks is a great way to make sure you stay on top of your taxes.

Discover QuickBooks Self-Employed today

The information on this website is provided free of charge and is intended to be helpful to a wide range of businesses. Because of its general nature the information cannot be taken as comprehensive and they do not constitute and should never be used as a substitute for legal, accounting, tax or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. Any reliance you place on information found on this site or linked to on other websites will be at your own risk.