What is Budget Payment Plan?
HM Revenue and Custom has offered a payment method which allows a person to make a volunteer decision towards the future personal tax bills. If one is registered for self-assessment online and if regular in tax payment then one can set a fixed amount either weekly or monthly or direct debit which is collected by HMRC. A Budget Payment Plan (BPP) is a convenient way to pay the Self Assessed Income Tax (ITSA) for the customers. The BPP is available for all the tax payers, those who want to enroll in self-assessment online must have their up to date tax payment record. For such tax payers the BPP is one of the best services to get sign up with as it saves the customer’s reference number which never need to be remember or fill every time when make the payment.
If a person is not up to mark with the Self- Assessment online payments then one can also take the assistance of HMRC Payment Helpline, so that an appropriate guidance could be grabbed in bringing the tax procedure up to mark and on time and also to know the best suitable time to start with the online payment plan.
How It Works?
HMRC has introduced an easy and user friendly payment model for the customers. In this model an early payment would be made of the issued deadline and also there is a facility to skip or miss a payment or vary the amount of the installment as long as the liability met by the due date. To have this facility a customer needs to register first if never have been used the self-assessment online before, for this:
- Firstly, visit the official website of HMRC and click the self – assessment link in the Do it online option.
- All the relevant instructions will automatically flash on the screen mentioning the directive links to be clicked, which needs to be followed serially
- Just after the tab click an immediate access to direct debit online will be provided and further in few working days an Activation PIN will also be send to the user.
- This PIN is then needs to be activate within 28 days of issue, on failure of this the self – assess and direct debit payment admittance could be mislaid.
- Since all the payments made under the Budget Payment Plan model benefitting a lessening in overall tax bills, hence must be paid in whole either on January 31 or July 31 of every concerned year.
Budget Payment Plan – Cost to HMRC and the Customer
Since the continuing annual cost of the processing a huge amount of payment in the budget payment plan and the charges made by the concerned banks might vary in the acceptance of the tax or sometime could even be similar. Hence a variable figure comes up costing in the processing of this BPP model. Although the economy has been grown up for the consecutive years and expected to remain budding. As forecasted by Office for Budget Responsibility (OBR), in 2018 the expected GDP growth rate is calculated to 1.5% and so to have an increase of 1.3% - 1.4% in the succeeding years and hence expect the wages to rise faster than charges in coming five years.
On the other side, the debt also been fallen gradually since 2010. As predicted, the UK debt will fall to 85.5% of the GDP by the year 2018 and so will continue to fall in the coming years significantly.
Talking about the cost to costumer, it is calculated assuming that all the tax payers have joined the scheme at the beginning and thus been able to file the maximum number of the tax payment. In general terms, a 10% acceptance rate for budget payment plan is considered to imply which do not count as an administrative burden.
Benefits of the Model
A Budgeted Payment Plan is an easier mode of tax payment for the customers paying their Self- Assessment (SA) tax. Payment through BPP is an intended and suitable way focusing the future accountability towards regular tax payers. This budget plan is quite a flexible payment method which facilitates an individual to:
- Decide the weekly or monthly amount to pay HMRC as per the payer’s convenience,
- Change the value of regular taxable amount,
- Hold the tax payment for up to 6 months,
- Withdraw the plan at any time,
- Comparatively faster payment process saving means of time of the user. Usually it hardly takes few minutes to set up a payment plan instructions,
- Process for the tax payment as per the accessibility,
- Work and process in a secure environment under the shade of all legislative directives,
- Process with a well proven method of making tax payment,
- Set up a single and onetime payment through self-assessment,
- Regulate other type of taxes and duties in a single tax pay model,
- Control the finances of the customer as well as providing a chance to budget one’s monetary alignments,
- Motivate an individual to extemporize the involvement in payment,
- Complete all outstanding tax return as soon as possible,
- Avoidance of swinging payable amounts every time.
In spite of having numerous positive sides of the offered, the Budget Payment Plan if not effectively offering any return to the investment done to HMRC by the customers, then this would definitely not be a good option to go with. However, it not only supports an individual with a legislative solution against the heavy struggle in planning and maintaining the tax payment but also set a person free from the time bound and hectic tax payment procedures.
This budget payment plan not only assistances to manage and range the tax and duties payable over number of months but sometimes also process the taxation in advance before the due date benefiting with other relaxations and also develops a sense of freedom and happiness.