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How do you pay a tax bill you didn’t see coming?

ended 10. November 2026

Every January, HMRC’s self-assessment deadline lands and many people will get a far bigger bill than they'd anticipated. We want to know what people's options are when the bill is bigger than the bank balance. They could range from a Time to Pay plan with HMRC, to a remortgage or further advance, a secured loan, a bridging loan against property, selling shares or other investments, drawing on a pension, or borrowing against the business. Each has a cost, a speed and a catch, and the wrong one can turn a one-off bill into a long-term problem. Newspage is asking mortgage brokers, financial advisers, accountants and specialist lenders what they’re seeing and what they tell clients.

Questions for Newspagers

  1. How often do you see people getting caught out by an unexpected tax bill?
  2. In what order would you look at the ways of paying: HMRC Time to Pay, remortgage or further advance, secured loan, bridging, selling investments, pension drawdown? Which do you rule out first, and why?
  3. When is borrowing against the home to pay HMRC a sensible move and when is it a mistake? What does a lender need to see for a further advance or remortgage where the stated purpose is a tax bill, and how long does it take?
  4. Bridging loans are sold for exactly this situation. What does one cost on, say, £50,000 for six months, what’s the exit, and who should never touch one?
  5. What should someone do in the weeks before 31 January if they already know they can’t pay in full? Who should they speak to first, and what makes HMRC more, or less, willing to agree a payment plan?

4 responses from the Newspage community

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Tony SanchezVerified
Founder at Bridging Loan Directory
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A tax deadline doesn’t always line up with when the money comes in. A business can be trading well but have cash tied up in unpaid invoices or be waiting for payment on a large contract.

For someone with equity in property, a bridging loan can release funds to pay the bill and buy time until that income arrives. The same can apply when someone is waiting for an inheritance or a sale to complete.

That’s where bridging can be useful: covering a temporary cash-flow gap, with repayment coming from an identifiable source.
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Harvey DhillonVerified
Founder & CEO at Zmartly
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I see sellers caught out by a tax bill they haven't saved enough for, because high turnover and constant cash coming in hide what they're actually making. Borrowing against your home before you've even asked HMRC for a payment plan is a mistake. I'd use savings and investments first, then a plan, and a lender only if HMRC won't agree one you can afford. What lenders need and what bridging costs is a broker's call, not mine. I'd rule out the pension first. HMRC doesn't count your pension pot as savings when it works out what you can pay, and a big withdrawal above the tax-free part could be taxed at a higher rate. If you can't pay in full, file your return and go to HMRC before anyone else: it says a plan can't be set up until the return is in. HMRC is likely to be more willing if you ask before the bill is due, and its starting point is to refuse anyone who broke a plan in the last 18 months. Don't let the first conversation be the one HMRC starts.
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Nouran MoustafaVerified
Practice Principal & IFA at Roxton Wealth
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A £20,000 tax bill is painful. Turning it into a £30,000 borrowing problem is considerably worse.

Before remortgaging, selling investments or touching your pension, here's a question: have you actually spoken to HMRC?

Time to Pay should be explored first. It may allow manageable instalments, although interest applies.

Borrowing against property can work, but securing a tax debt against your home is serious business.

Bridging would be near the bottom of my list. A £50,000 loan at 0.75% monthly interest costs £2,250 over six months, before fees.

Selling investments could trigger tax or crystallise losses. Pension withdrawals could create another tax bill!

Why borrow expensive money to pay HMRC before asking HMRC for time?

Speak to your accountant and HMRC before 31 January. Ignoring the problem won't make the bill disappear.
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David StirlingVerified
Independent Financial Adviser at Mint Wealth
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A big January tax bill is painful, but panicking can make it much more expensive. My first call would normally be to HMRC to explore Time to Pay before putting the bill onto the family home. After that you can consider cash, investments and sensible mainstream borrowing, but bridging and pension withdrawals are very much towards the bottom of my list. Turning a £30,000 tax bill into a 20-year mortgage might make the monthly payment look better but the total cost considerably worse, while taking money from a pension can create another tax bill to pay the first one.

Above all, don't bury your head in the sand and hope HMRC forgets where you live. File early, know the number and deal with it before January 31st turns a tax problem into a borrowing problem.