Can’t Pay Your Tax Bill in Full?

There’s a Practical Option Many Landlords Miss

January tax bills often catch landlords off guard. Between higher mortgage costs, void periods, and rising expenses, it’s not unusual to find yourself short of cash when your Self Assessment payment is due.

If paying the full amount by 31 January isn’t realistic, HMRC does offer a legitimate way to spread the cost without immediately facing penalties or enforcement action.

HMRC’s Time to Pay: What It Means in Practice

HMRC’s Time to Pay arrangement allows taxpayers to break a tax bill into monthly payments rather than settling it in one lump sum.

It’s designed for people who remain financially viable but need short-term flexibility. Once agreed, payments are collected by Direct Debit over an agreed period, giving you time to manage cash flow more effectively.

For many landlords, this can be the difference between staying compliant and falling into avoidable difficulty.

Who Can Set Up a Payment Plan Online?

Most landlords can arrange Time to Pay directly through their HMRC online account if:

• The total owed is £30,000 or less
• The Self Assessment return has already been submitted
• The repayment period is 12 months or fewer
• There are no outstanding older tax debts

In these cases, the process is automated and doesn’t require a phone call.

If your tax bill exceeds £30,000, or you need longer to repay, HMRC will still consider a plan but you’ll need to contact them and provide a clearer picture of your finances.

Interest Still Applies But Penalties Can Be Avoided

It’s important to be clear on the trade-off.

While Time to Pay helps prevent late payment penalties, interest continues to run on the unpaid balance until it’s cleared. The sooner a plan is set up, the lower the overall cost.

What HMRC is primarily concerned with is engagement. Taxpayers who act early and stick to an agreed plan are treated very differently from those who ignore the bill.

Why Acting Early Matters for Landlords

Rental income doesn’t always align neatly with tax deadlines. Delayed rent, unexpected repairs, or periods without tenants can all disrupt cash flow.

HMRC would rather see a realistic repayment plan in place than take enforcement action. Waiting until after the deadline or doing nothing significantly reduces your options.

Already Filed but Can’t Pay? This Is the Correct Next Step

Filing your tax return on time is essential, even if you can’t pay immediately. Once the liability is known, a Time to Pay arrangement allows you to deal with the payment sensibly and transparently.

For landlords, this is often a safer route than using short-term credit or withdrawing funds at the wrong time.

When Professional Advice Helps

Time to Pay isn’t one-size-fits-all. You may benefit from specialist advice if:

• You have multiple properties or mixed income
• You owe tax across more than one year
• You’re considering restructuring or incorporation
• You need longer-term repayment terms

Handled properly, discussions with HMRC can be straightforward. Handled poorly, they can become unnecessarily stressful.

Thandi Nicholls Ltd
Creative Industries Centre
Glaisher Drive
Wolverhampton
West Midlands
WV10 9TG