File the return on time even if you cannot pay the bill. Then tell HMRC you need a payment plan. A filed return with an unpaid bill is one problem. An unfiled return with an unpaid bill is two, and the filing penalties keep climbing while you wait to feel ready.

HMRC would rather collect the tax in instalments than chase you. They will not volunteer that if you go quiet.

Pay something today

Interest runs from the day after 31 January until the tax is paid. Late-payment penalties are 5% of whatever is still unpaid at 30 days, 6 months and 12 months. Every pound you send now is a pound those percentages do not apply to.

Use Faster Payments or the HMRC app so it reaches them quickly. Put your UTR in the payment reference.

If the deadline has not yet passed

You can pay towards the bill in weekly or monthly chunks before 31 January. HMRC call this a Budget Payment Plan. It is for a bill that is not overdue yet. Set it up from your online account or the paying-in pages on GOV.UK.

Paying early does not reduce the tax. It just means 31 January is not one large transfer.

If the bill is already late: Time to Pay

Once the bill is overdue you want a Time to Pay arrangement: a monthly Direct Debit until the debt is cleared. You can often set this up online.

You will need:

HMRC check that the plan is affordable. If you have savings or assets, they will expect you to use those first to bring the debt down. That includes money sitting in the business account that is not needed to keep trading.

If you cannot use the online service, contact HMRC's payment-problems line and be ready with the same figures. If a debt adviser at Citizens Advice has prepared a Standard Financial Statement, HMRC will take that as evidence of what you earn and spend.

They may refuse a plan and ask you to pay in full. At that point you still do not ignore them. Pay what you can, get debt advice, and keep the conversation open.

Interest still runs

A Time to Pay plan spreads the debt. It does not freeze interest, and HMRC will not write the tax off because you asked nicely.

File the return first. A plan only covers tax you have already declared.

You may still have payments on account for the year now in progress. Those only come down if you ask HMRC to reduce them because this year's profit has actually fallen.

What happens if you do nothing

HMRC can collect through a collection agency, take money from your wages or pension, go to court, or in the worst cases take enforcement action against your things. None of that starts on 1 February, but it is the path unpaid, un-arranged tax walks down.

The GOV.UK page what will happen if you do not pay is the official version. Read it if you need the push.

This is not a reasonable excuse for a late return

"I did not have the money" can get you a payment plan. It will not usually get a late-filing penalty cancelled. That is why the order is file, then arrange. The missed deadline page has the penalty ladder and how to appeal if something else genuinely stopped you.

So it is not like this next year

The bill is a percentage of last year's profit. The shock is almost always that the money was spent. Hold back 25% of profit as you earn, in a separate account, and January becomes a transfer you already knew about.

If this year's work is down on last year's, reduce the payments on account rather than borrowing to overpay. If this year is similar, the second January is usually smaller than the first because the advance payments are already on the card.

The first-timer walkthrough is the process without the debt. Use it once you are current.