What to do if you’re worried about paying your tax bill

Those worried about paying their tax bills this January shouldn’t panic, says Ben Finch, an accountant at The Fresh Accountancy Company.

As the tax deadline approaches, some people may feel anxious, especially if their bill is higher than expected. However, Ben advises: “The worst thing you can do is ignore the issue. If you’re struggling to pay in full, take action early - there are options available.”

The first step is to contact HMRC directly. They may discuss extending the payment deadline or suggest making a partial payment before 31 January to demonstrate your intention of paying the liability.

Another option is to request a Time to Pay (TTP) arrangement. This allows you to spread payments over manageable monthly instalments. However, you must stick to the agreed schedule - missing a payment will void the arrangement. Additionally, you’ll still need to pay ongoing tax obligations, such as VAT or PAYE, on time.

While these measures can provide relief, preparation is always better. Requesting monthly or quarterly management accounts from your accountant will provide an estimate of your tax liability throughout the year. This foresight makes it easier to budget and save in advance.

For self-employed individuals, saving monthly is essential. Looking at income and outgoings will provide an idea of the profit that is being made. “If you then save 20 percent of this in a separate account each month it will help cover your tax bill due for that year, and lessen your anxiety as the January deadline approaches.”

For basic rate taxpayers, taking into account the personal allowance of £12,750, this often covers the tax bill in full, while higher rate taxpayers can significantly reduce their lump sum burden.

“Paying tax reflects your success - it's the price of profit,” says Ben. “By staying proactive and prepared, you can reduce financial stress and ensure you meet your obligations with ease.”

By being proactive, planning ahead, and seeking help when needed, you can make January’s tax bill far less stressful. For more tailored advice, speak to your accountant or contact HMRC directly.