How to pay your 31 January tax bill

taxbillIt’s that time of the year again. No, we are not reminding you to fill in your 2010/11 Self Assessment Tax Return, because we already did that. Now we are reminding you to actually pay your tax bill- after all, you might have smugly completed it back in May.

31 January Due Date

31 January 2012 is the due date for payment of any outstanding tax due for the tax year ended on 5 April 2011, to correspond with the 2010/11 tax return, but is also the due date for the first Payment on Account towards next year’s income tax liability (the tax year that ends on 5 April 2012) as well. Most people do not have to make Payments on Account, so those who are employees, pensioners, those where 80% of the tax due is collected via PAYE and those where the Payments on Account would total less than £1,000 can breathe a sigh of relief and laugh at the self- employed and landlords.

If you completed your return early, you should have received a reminder of the amount due from HMRC; however, non-receipt of a reminder is no excuse for not paying your tax. If you have completed your return in the past few months, you would have had to do it online, so you should have a note of the amount to pay, or you can check your online record.

So. Assuming you have tax to pay, how do you go about actually paying it, and what happens if you are struggling?

Payment methods

Given that everything is online and stuff, the quickest and easiest way for most people would be to pay online.

You can pay by telephone or internet banking and in most systems, you should select HMRC as the payee in the relevant section of your internet banking. If you do need to set it up manually, the account names and numbers you need are as follows:

Cumbernauld office: Sort code 083210   Account number 12001039   Account name HMRC Cumbernauld.

Shipley office: Sort code 083210   Account number 12001020   Account name HMRC Shipley.

If you don’t know which office is yours, use the Cumbernauld account. Always quote your UTR (ten digit tax return identification number) followed by the letter K as a reference. HMRC now accept faster payments, but if you are not sure whether your bank uses faster payments or not, allow three working days for the cash to reach HMRC’s account.

If you are a bit weird, or if you have a payment plan in place (see below) you could, instead, set up a direct debit in favour of Her Majesty’s finest and they will just take the money out of your bank account when they feel like it.

Or, if you just want to pay by card you can use BillPay with a debit or credit card. That’s right, the taxman does take plastic (but not American Express) for a 1.4% fee. Do that here.

But what if this is all too modern for you and you fancy a stroll to the high street? Well you can pay in person via Bank Giro at your bank or via the Post Office. Note that you will need to take an HMRC payslip with you (they send you these at the bottom of statements) as otherwise you may get charged. How much is unknown, but presumably more than the fraction of a pence it costs the bank/Post Office to use one of their own payslips. Alternatively you can generate and print off a payslip from HMRC’s website.

Finally, you can also pay by post, and stick a cheque in the prepaid envelope they have sent you. You should

>  make your cheque payable to 'HM Revenue & Customs only' and write your Self Assessment reference number after 'HM Revenue & Customs only'

>  detach the payslip and send it with your cheque to HMRC using the pre-addressed envelope sent to you or the appropriate address below

>  NOT fold the payslip or cheque and don't fasten them with paper clips or staples or in any other manner

HMRC recommend allowing at least three working days for your payment to reach them. They do not accept postdated cheques.

If you don’t have a pre-addressed HMRC envelope, use the following address:

HM Revenue & Customs
BD98 1YY

But what if I don’t have the money?

It’s January. The longest month of the year and the one where no one has any money. What better time, then, to ask people to cough up shedloads of cash in tax bills.

If you are struggling to pay your tax bill, you have a number of options. The first is to just not pay it. While this will work for a while, HMRC do, ultimately, have the power to send the bailiffs in and even make you bankrupt in order to collect their cash. This is therefore not a recommended long-term option.

However, if you are experiencing a short cash flow issue, provided you can pay by 1 March, not paying may be the cheapest option. HMRC will charge you interest on amounts paid late, but at a rate of 3% per annum, 30 days credit from the taxman will be considerably cheaper than putting it on your credit card or, heaven forbid, borrowing from a payday lender.

Do note that once the tax is 30 days late, however, a late payment penalty of 5% is added to the outstanding sum, with a  further 5% penalty every six months thereafter. Plus interest and threatening letters. Last year, the letters chasing payment tried to invoke a social conscience, telling you about all the millions of people who had paid their tax on time, asking why were you depriving society of its cash.

I really don’t have the money.

If you really can’t pay your tax bill, there are still some things you can do. Right now, you can contact HMRC's Business Payment Support Service Helpline on Tel 0845 302 1435.

This service is available for individuals and businesses who have not yet received a payment demand, and provided they are satisfied you are genuinely struggling to pay, HMRC may allow you to pay the bill off in monthly amounts by direct debit.

If you wait until after the demand for payment is issued, you will need to speak to your individual tax office about your payment options, and the telephone number will be shown on the demand for payment that will be issued shortly after 31 January.

Note that any late payments will include interest (at 3% per annum) but not penalties.

If you do not contact HMRC, they will send debt collectors after you. These organisations are not Government owned or run and can be just as vicious as any othe debt collection agency in the private sector.

If none of this helps, try contacting your local Citizen’s Advice Bureau or the National Debtline for additional support.


  • The B.
    Why do I get taxed year on year for having private health insurance? I'm taking the strain off the NHS.
  • Alexis
    "can be just as vicious as any othe debt collection agency in the private sector." ie. not very
  • Kevin
    'It’s January. The longest month of the year and the one where no one has any money. What better time, then, to ask people to cough up shedloads of cash in tax bills.' You are supposed to set aside money all through the year so you CAN pay the tax bill.
  • Happy T.
    @Kevin Thanks for the advice. And there I was, thinking that PAYE sorted it all out. Seems they make up some random numbers, issue 3 difference Coding Notices, get it wrong and then slap a large tax bill on me anyway. So yeah, I'll just put all my money away in case the Pub-stewards want to take it... on account for 2011 / 12 !!!
  • Andrew R.
    I go through the same rigmarole every year. I've never been self employed, and I always get sent a tax return to fill in. Always get told to do it online, have never registered online, always get fined for not filling one in, always send a letter to HMRC saying I'm not self employed, always get the fine cancelled and assurance they won't send me another one. Been 3 years now, and yet again I will let the deadline lapse and wait for the fine. Absolute, incompetent shitbags!
  • tax p.
    Is a finance degree good for something other than investment banking?

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