HMRC Time to Pay for gig workers (2025-26)

Summary

HMRC's Time to Pay lets most gig workers spread a Self Assessment bill of up to about £30,000 over monthly payments, but interest still runs and you must set it up quickly after 31 January. Above that threshold, or if you already have tax arrears or very low spare income, you need to speak to HMRC by phone and may be better off talking to TaxAid, StepChange or National Debtline as well. A typical Uber driver with a £3,000 bill in January 2026 can often get up to 12 months to pay online, but faces daily late-payment interest at around 7.75% a year in early 2026 and risks penalties if they default.

Key facts (UK 2025 to 26)

Self Assessment tax for the 2024 to 25 tax year is due by 31 January 2026 if you file online.

HMRC's online Time to Pay self-service can be used for Self Assessment if, in 2025 to 26, all returns are filed, the total Self Assessment bill is less than £30,000, you have no other overdue tax debts and it is less than 60 days since the payment deadline.

Typical online arrangements are for up to 12 months, for example tax advisers in 2025 describe plans running over 12 months for bills under £30,000 as standard.

If you owe more than £30,000, or need longer than about 12 months, you must ring HMRC's Self Assessment Time to Pay line. HMRC will ask about income, outgoings, assets and other debts to decide what is affordable.

Late-payment interest on Self Assessment is set at Bank of England base rate plus a margin. GOV.UK's interest rates table shows late-payment interest at 8.50% from 6 April 2025, 8.00% from 27 August 2025, and 7.75% from 9 January 2026, so a gig worker entering Time to Pay in early 2026 can expect roughly 7.75% per year charged daily.

Time to Pay does not stop interest. HMRC continues to charge interest on the unpaid balance until it is cleared, even if you keep to the plan.

If you set up Time to Pay within 60 days and keep to it, you can avoid the 5% late-payment penalties that hit at 30 days, 6 months and 12 months late.

HMRC says Self Assessment debts and Time to Pay arrangements are not normally reported to credit reference agencies, so they should not appear on standard credit files, but serious enforcement such as County Court judgments or insolvency would affect credit. (This is based on HMRC and debt-advice guidance.)

Where there are multiple debts, or where Self Assessment arrears sit alongside rent, energy and high-cost credit arrears, specialist advice from TaxAid, StepChange or National Debtline is usually safer than relying on Time to Pay alone.

Legislation, case law, regulation

Taxes Management Act 1970, which underpins HMRC's power to collect income tax and to agree Time to Pay arrangements as a discretionary concession.

Finance Acts for recent years, which set late-payment interest rules and enable HMRC to charge interest at base rate plus a set margin.

HMRC's published "Time to Pay" policy for Self Assessment, as reflected in GOV.UK guidance and HMRC press releases on payment plans in December 2025 and January 2026, which confirm online plans up to £30,000 and the need to have filed the return first.

HMRC's "Interest rates for late and early payments" page on GOV.UK, which sets the official late-payment interest rates applied to Self Assessment from 6 April 2025 onwards.

How it actually works

From a gig worker's point of view, Time to Pay is HMRC's way of saying "if you cannot pay your tax bill in one go, we would rather you talk to us early and pay in instalments than ignore it". To use it in 2025 to 26, you must first file your Self Assessment return for 2024 to 25, so HMRC can see exactly how much you owe. You cannot set up a plan off a guess and you cannot use Time to Pay if you have not filed.

If your total Self Assessment bill is under £30,000, and it is less than 60 days since 31 January, you can usually set up a plan online without speaking to anyone. You log into your HMRC online account, go to "Self Assessment" and look for "Set up a payment plan" or "Pay in instalments". The system will ask how much you can pay up front, when you want payments to start and how long you need. Many tax guides say HMRC expects the debt to be cleared within 12 months, and will reject or flag plans that try to drag it out far longer.

During that online process, HMRC's system calculates a monthly payment based on the amount owed and the time you choose. It then shows you the monthly direct debit amount. If you agree, you set up a direct debit and the plan starts. You avoid late-payment penalties as long as you set this up within 60 days of the deadline and stick to it, but HMRC still charges late-payment interest daily on whatever balance remains.

If you owe more than £30,000, are more than 60 days late, already have a Time to Pay arrangement, or need longer than HMRC's online tool allows, you must phone HMRC's Self Assessment helpline. On the phone, they will go through an informal "income and expenditure" chat. They ask what you earn from gig work and any PAYE job, what benefits you receive, and what your regular household costs are, such as rent, energy, food, petrol, insurance, debt repayments and childcare. They may ask if you have savings or assets, for example a second vehicle or property, and whether you can sell or remortgage, though that is rarer for small debts.

Based on that affordability picture, HMRC will offer a Time to Pay plan, for example spreading a bill over 6, 9 or 12 months. They will always charge late-payment interest at the current rate, which in early 2026 is around 7.75% per year on Self Assessment, set at base rate plus 4%, with the exact figure shown on GOV.UK's interest rates page. Interest is calculated daily, so paying earlier always reduces the total cost.

If you miss a payment or cancel the direct debit, HMRC can cancel the plan. That usually means the full debt becomes due again straight away. You are then at risk of 5% late-payment penalties at 30 days, 6 months and 12 months late, on top of interest, if enough time has passed. HMRC can then use enforcement tools such as debt collectors, direct recovery from bank accounts, or legal action, although for small gig worker debts they usually try letters and phone calls first.

Time to Pay is not a debt-advice solution. TaxAid, StepChange and National Debtline all warn that it is only sensible if the tax bill is your main problem and you can afford the instalments after covering rent, food and priority debts. If you are already behind on rent, council tax, energy or high-interest credit, or if your income is very volatile, there is a real risk that a Time to Pay agreement pushes you into deeper trouble and then fails, which can make HMRC less willing to be flexible next time. In those cases, speaking to a free debt adviser first is often safer.

Worked example

Take a 34 year old Uber driver in Birmingham with £42,000 turnover and about £8,000 allowable expenses in the 2024 to 25 year. After deducting expenses, his taxable profit is around £34,000. He has some PAYE job income earlier in the year, but for simplicity assume his Self Assessment calculation shows a £3,000 income tax and Class 4 National Insurance bill due by 31 January 2026, plus payments on account. He has only saved £500.

On 31 January 2026 he files his return online and sees the £3,000 bill. He knows he cannot pay in full. Because he has filed the return and owes less than £30,000, and has no other HMRC debts, he qualifies for online Time to Pay within 60 days. On 1 February 2026 he logs into his HMRC account and clicks "Set up a payment plan". The system asks how much he can pay now; he enters £500 as an upfront payment. It asks how many months he needs to clear the rest; he chooses 10 months from March 2026 to December 2026.

HMRC's system calculates that he will owe £2,500 spread over 10 months, so £250 a month, plus late-payment interest at the current rate, which early 2026 sources put at about 7.75% per year charged daily. The system shows a slightly higher monthly payment to reflect interest, for example around £255 to £260 a month. He agrees, sets up the direct debit for the agreed date each month, and gets an online confirmation.

Because he set this up quickly after 31 January 2026, he avoids the 5% late-payment penalties that would have hit from early March 2026 onwards. Interest still runs, adding maybe £80 to £100 in total over the life of the plan, depending on exact rates and how quickly he pays. HMRC does not report the Time to Pay to credit agencies, so his credit file is not directly marked, although any County Court action in a worst-case scenario would be.

If, three months in, he starts missing payments because his Uber earnings crash, HMRC can cancel the plan. They will send warning letters, and if he does not call to renegotiate, they may reinstate late-payment penalties and move to enforcement. At that point Time to Pay stops being the right answer. If he is behind on rent and energy as well as tax, he should contact TaxAid for tax-specific help and StepChange or National Debtline to look at a full debt solution, which might include a new Time to Pay as part of a broader plan or, in extreme cases, a formal insolvency or write-off route.

What Reddit, TikTok and forums get wrong

Misinformation: "If you cannot pay HMRC in January, just ignore it and earn more next year, they will not chase small amounts." This kind of advice shows up in social media threads about Self Assessment panic. Correction: HMRC charges daily interest, adds 5% late-payment penalties at 30 days, 6 months and 12 months late, and can use debt collection even for relatively small debts. It is far safer to set up Time to Pay or speak to HMRC early.

Misinformation: "Time to Pay wipes penalties and interest, it is a free extension." Correction: HMRC's own guidance and tax-adviser summaries say Time to Pay does not stop interest. It can help you avoid late-payment penalties if agreed quickly and kept up to date, but you still pay interest on the unpaid balance until it is cleared.

Misinformation: "Setting up Time to Pay ruins your credit score, so it is better not to let HMRC set up a formal plan." Correction: HMRC and charity guidance say Self Assessment debts and Time to Pay plans are not normally reported to credit agencies, so they do not show on standard credit reports. Serious enforcement such as court judgments can affect credit, but Time to Pay itself is meant to avoid that outcome for people who are trying to pay.

Action steps for the reader

As soon as you realise you cannot pay your January Self Assessment bill, file your 2024 to 25 return if you have not already. You cannot get Time to Pay until the return is in.

Log into your HMRC online account and check if your total Self Assessment bill is under £30,000 and less than 60 days overdue. If it is, use the online "Set up a payment plan" tool to spread the cost over up to 12 months.

Before you fill in the Time to Pay form, look honestly at your gig income and household budget to choose a monthly payment you can actually afford, rather than just the quickest possible schedule.

If you owe more than £30,000, are more than 60 days late, or already have tax arrears, ring the Self Assessment helpline and be ready to answer questions about income, outgoings and any savings or assets.

Once a plan is agreed, set up the direct debit and put the payment dates in your diary. Do not miss payments. If your situation changes, call HMRC before a payment bounces to try to adjust the plan.

If your tax bill is only part of a wider debt problem that includes rent, council tax, energy or credit arrears, contact TaxAid for tax issues and StepChange or National Debtline for full debt advice instead of relying on Time to Pay alone.

Keep track of the one-year window and the interest rate shown on GOV.UK, because late-payment interest for 2025 to 26 is around 7.75% a year as of January 2026 and changes when the Bank of England base rate moves.

Related tools GigKiln should build

Time to Pay eligibility checker that takes the tax bill amount, days late and any other HMRC debts and tells a gig worker whether they can use the online service or need to call.

Time to Pay payment-plan simulator that shows different monthly payment options, total interest cost at 2025 to 26 rates, and flags when a plan looks unrealistic.

Self Assessment stress-test tool that lets gig workers plug in their typical Uber, Deliveroo or Amazon Flex numbers and see how much to save each week to avoid January debt.

HMRC call script generator that helps gig workers prepare answers for the income and spending questions HMRC asks before agreeing Time to Pay.

Priority-debts triage tool that helps gig workers see when tax should be treated as one of several debts and when they should speak to TaxAid, StepChange or National Debtline first.

Related guides

"Step by step, setting up HMRC Time to Pay for Self Assessment when you drive for Uber."

"What HMRC ask on the phone when you cannot pay your tax bill as a gig worker."

"Interest, penalties and Time to Pay for Self Assessment in 2025 to 26."

"How much should gig workers save each week to dodge the January tax shock."

"When Time to Pay is not enough and you need TaxAid or StepChange instead."

Sources

TaxAid, "You need time to pay", guidance on Self Assessment Time to Pay for debts under £30,000, eligibility, 60-day window and contact details, accessed 19 April 2026.

GOV.UK, "HMRC offers time to help pay your tax bill", press release on Self Assessment Time to Pay and Simple Assessment, 8 December 2025, accessed 19 April 2026.

Knight Group, "HMRC offers time to help pay self assessment tax bills", 5 January 2026, summarising HMRC's online Time to Pay facility for bills up to £30,000, accessed 19 April 2026.

TaxDash and other tax-adviser blogs, "Spread the cost of your Self Assessment tax bill with HMRC's Time to Pay", including the £30,000 threshold, 12-month typical length and conditions, accessed 19 April 2026.

GOV.UK, "HMRC interest rates for late and early payments", interest rates table showing late-payment interest changes from 6 April 2025 and 9 January 2026, accessed 19 April 2026.

ACCFirm and other tax-penalty guides, "Self-Assessment Late Payment Penalties UK 2025/26", explaining interest as base rate plus margin and the 5% penalties at 30 days, 6 months and 12 months, accessed 19 April 2026.

London Loves Business and Qdos commentary, "HMRC is charging 7.75% interest for late-paying self-assessment taxpayers", 26 January 2026, accessed 19 April 2026.

GOV.UK, "Self Assessment tax returns: Deadlines", accessed 19 April 2026.

Daniel Wolfson, "Self-Assessment Tax Returns Deadline 2025/26: Complete UK Guide", including criteria for online Time to Pay and under-£30,000 rule, accessed 19 April 2026.

The Fed and PHTM trade posts relaying HMRC's Time to Pay messaging for self-employed and taxi drivers, accessed 19 April 2026.