HMRC Time to Pay Calculator

If you can’t pay a Self Assessment tax bill in full, HMRC’s Time to Pay service lets you spread it over instalments — but it’s not an interest-free grace period, and it’s not automatic. This calculator works out what a plan would actually look like: your monthly payment, the total interest you’d pay at today’s 7.75% a year rate, and a full month-by-month schedule. It also checks whether you meet HMRC’s published criteria for setting a plan up online yourself, without a phone call.

Interest Keeps Running — This Isn’t a Free Pause

The single most common misunderstanding about Time to Pay: agreeing a plan doesn’t stop the clock on interest. HMRC charges late payment interest — currently 7.75% a year, set at the Bank of England base rate plus 4% — on your outstanding balance for as long as any of it remains unpaid, plan or no plan. This rate isn’t fixed either: it moves whenever the Bank of England changes its base rate, so a rate quoted today could be different partway through a long plan (this calculator uses today’s published rate for the whole schedule, which is the standard, honest way to project a plan, but isn’t a guarantee the rate stays put).

What a Payment Plan Actually Looks Like

Each month, interest is calculated on whatever balance is left, then the rest of your payment reduces the balance itself — exactly like paying off a loan. That means the interest portion of your payment is highest in month one and falls every month after, even though the total payment stays level. Spread a bigger debt over more months and your monthly payment drops, but the total interest you pay rises, since the balance stays higher for longer. There’s a genuine trade-off here, not a free lunch — this calculator shows both sides of it side by side rather than only quoting the smaller monthly number.

Worked Example

Someone owing £3,000, spreading it over 6 months at today’s 7.75% rate, would pay £511.36 a month — six equal payments totalling £3,068.18, of which £68.18 is interest. Look at the schedule month by month and the split shifts: month one’s payment is £19.38 interest and £491.99 principal, but by month six that’s fallen to £3.28 interest and £508.08 principal, since there’s less balance left to charge interest on each time. Stretch the same £3,000 over 18 months instead and the monthly payment drops to roughly £180, but total interest more than doubles versus the 6-month plan — a longer plan eases monthly cash flow at the cost of paying more overall, which is exactly the trade-off this calculator is built to make visible rather than hide behind a single “affordable” number.

Can You Set This Up Online, or Do You Need to Call HMRC?

HMRC’s self-serve online Time to Pay service (through your personal tax account, no phone call) is available when all of these are true:

• The debt is Self Assessment (not VAT, PAYE, or Corporation Tax — those need a phone call to HMRC’s Payment Support Service)
• Between £32 and £30,000 — a lower bound most guides leave out, mentioning only the £30,000 ceiling
• Within 60 days of the payment deadline
• Your tax return has already been filed
• You don’t already have another payment plan or HMRC debt outstanding
• You can pay it off within 12 months

Miss any one of these — a bigger debt, an older deadline, wanting longer than 12 months — and you’ll need to call HMRC directly. A plan may still be possible, just not through the instant online route.

Why Timing Matters: The Late Payment Penalty Clock

Separately from interest, Self Assessment carries its own late payment penalties: 5% of whatever’s still unpaid at 30 days late, another 5% at 6 months, and another 5% at 12 months — up to 15% on top of the original debt over a year, entirely separate from interest. Agreeing a Time to Pay arrangement before a milestone is reached, and sticking to it, generally stops that specific 5% penalty from being charged. This is why acting early is worth more than the interest math alone suggests — every milestone you pass before setting up a plan is a 5% charge interest can’t undo. (This calculator shows where you stand against these milestones, but doesn’t calculate penalty amounts itself — HMRC’s own Estimate your Self Assessment penalties tool does that.)

Late Filing vs. Late Payment — Not the Same Thing

Worth disentangling since the two are easy to confuse: late filing penalties (£100 immediately, rising with daily charges and further percentages the longer a return goes unsubmitted) apply for not sending your return in on time. Late payment penalties and interest — what this calculator is about — apply separately, for not paying what you owe on time, even if the return itself was filed perfectly on schedule. You can owe one without the other.

Who Should Use This Calculator?

Anyone who owes Self Assessment tax they can’t pay in one go and wants to see real numbers — a monthly figure, the actual interest cost, and whether they’re likely to qualify for the quick online route — before contacting HMRC. It’s not a substitute for actually setting up a plan (only HMRC can do that), and it can’t guarantee HMRC will accept the exact schedule shown, since real arrangements are agreed individually based on an affordability assessment, not a fixed formula.

Important Information

Interest rate: 7.75% a year, effective from 9 January 2026 (Bank of England base rate + 4%). Last verified: 2026-09-09. This rate has changed five times in the twelve months before this one, so check GOV.UK’s own rates page if it’s been a while since this was last updated.

Official Sources

• GOV.UK — If you cannot pay your tax bill on time
• GOV.UK — HMRC interest rates for late and early payments
• GOV.UK — Self Assessment tax returns: Penalties
• GOV.UK — Estimate your Self Assessment penalties

Frequently Asked Questions

This calculator models a Self Assessment repayment schedule at today’s published HMRC interest rate. It is not an HMRC quote, and does not guarantee HMRC will approve the exact schedule shown — real Time to Pay arrangements are agreed individually based on an affordability assessment. It does not cover VAT, PAYE, Corporation Tax, or other non-Self-Assessment debts, and does not calculate penalty amounts. Contact HMRC or a qualified adviser about your specific situation.