What is a budget payment plan for self-assessment?
Answered 17 March 2026
Budget Payment Plan for Self-Assessment
What the law says
There is no specific statutory requirement for self-employed earners to make Budget Payment Plan payments — participation is entirely voluntary.
HMRC Guidance / Practice
Definition & Purpose
A Budget Payment Plan (BPP) is a voluntary customer service initiative that enables Self Assessment (SA) taxpayers to spread their payments and make regular contributions towards a future SA tax liability, particularly where they may have difficulty paying in full by the due date.
Key Features
A BPP customer can:
- Choose to pay on a weekly, monthly, or quarterly basis
- Change their regular payment amount at any time
- Suspend payments for a period of up to 6 months
- Cancel the BPP at any time
Eligibility
BPPs are only available where the self-employed earner is up to date with their Self Assessment payments. The onus is on the individual to set up the payments and decide how much to pay.
⚠️ Important change from 6 April 2024: Following the removal of the Class 2 Lower Profits Threshold, any self-employed person with profits at or above the Small Profits Threshold is treated as having paid Class 2 NICs. As a result, the BPP will no longer include Class 2 NICs after this date.
How to Set One Up
Customers can set up a BPP either over the phone or via the HMRC website (Online Services), using the National Direct Debit System (NDDS).
Important Distinction from Time to Pay
A BPP is not the same as a Time to Pay (TTP) arrangement. Requests to clear a liability by instalments before the due date are not considered TTP — provided the customer settles in full by the due date, they can pay whenever and whatever they wish via a BPP.
System Indicator
Internally, HMRC systems record a BPP signal ('Y' = plan in place; 'N' = no plan). Where the signal is set to 'Y', automatic repayments are inhibited to prevent payments intended for future SA liabilities from being incorrectly repaid to the taxpayer.
Citation sources
A Budget Payment Plan (BPP) is an easier way for customers to pay their Self Assessment tax and NICs. It's a customer service initiative; helping customers meet their payment obligation. Paying by BPP is voluntary and flexible and allows customers to make regular payments towards a future liability, especially if they're having difficulties paying in full at the due date. A BPP customer can: decide the regular weekly, monthly or quarterly amount they want to pay choose to change their regular pa
A Budget Payment Plan is a facility to enable selected SA taxpayers to spread payment and help them meet their payment obligations. Under the plan the taxpayer makes regular quarterly or monthly payments. The plan is voluntary and is designed to assist taxpayers who are likely to have difficulty making a payment on account in one amount.
Requests to clear a liability by instalments before the due date are not considered to be TTP. Providing that the customer settles in full by the due and payable date, they can pay whenever and whatever they wish. In Income Tax Self Assessment cases customers can set up Budget Payment Plans with us either over the phone or via the HMRC internet site. For further details see National Direct Debit User Guide.
Customers can access NDDS via their Online Services on the HMRC website. Customers must be registered for one or more of the following online services before they can set up a direct debit online: Self Assessment PAYE for employers Corporation Tax Construction Industry Scheme Machine Games Duty Customers can use NDDS to set up a single payment for: Self Assessment PAYE - including Class 1 National Insurance contributions Class 1A National Insurance contributions self-employed Class 2 National In
The Budget Plan Payment (BPP) signal indicates whether or not a taxpayer has set up a payment plan to pay their SA liabilities by direct debit. Where the signal is set to ‘Y’, this indicates that a payment plan has been set up and if the signal is set to the default setting of ‘N’, there is no payment plan in place. The signal is set or unset clerically using SA function AMEND TAXPAYER SIGNALS. From October 2008 the BPP signal is linked to the National Direct Debit System (NDDS), which means tha