Daniel Ferrer is a self-employed photographer in Almería. Between weddings, catalogues and a difficult year, he has three things he has not filed: his 2024 income tax return, with tax of 5,200 €; Modelo 303, the quarterly VAT return, for the third quarter of 2025, with 1,800 € of VAT to pay; and Modelo 111, the return for tax withheld, for that same quarter, with 420 € withheld from an assistant he paid through the payroll. In total, 7,420 € of tax before surcharges. He has 2,500 € saved and wants to file everything at the beginning of October 2026 and pay the rest over twelve months.
It can be done, but not with everything, and not in just any way. The order and timing of each step change what he ends up paying.
What the law does not allow to be split
Article 65.2 of the General Tax Act (the Ley General Tributaria) lists the debts that cannot be deferred, and two of them are in Daniel's drawer:
- The withholdings on the 111. Letter b) excludes the obligations of the withholding agent. That money was taken out of the assistant's pay and never belonged to Daniel.
- The VAT charged on the 303. Letter f) excludes taxes that must be passed on to the customer, "unless it is duly shown that the tax passed on has not actually been paid". If his clients paid his invoices with VAT included, that part cannot be deferred either.
The law does not say that those applications are considered and refused: it says they are ruled inadmissible. An inadmissible application has no effect at all, and the debt follows its course as if nothing had been requested.
In Daniel's case there is a useful nuance. A catalogue client still owes him an invoice for 2,857 € plus 600 € of VAT. If he shows that he has not received that VAT, with the invoice and the statement showing that the payment has not come in, that 600 € part can be included in the deferral. The rest of the 303, 1,200 €, has to be paid.
The full list is in the guide to debts that cannot be deferred.
When to ask: with the return, not afterwards
This is where the most expensive mistake in the process lies. Article 46.1.a) of the General Tax Collection Regulation says that, when a self-assessment is filed late, the application for deferral is only treated as made in the voluntary period if it is filed together with the late self-assessment.
If Daniel files his 2024 income tax return without payment and asks for deferral a week later, article 161.1.b) of the Act will already have opened the enforcement period on the day after filing. The debt will carry an enforcement-period surcharge, which starts at the 5 % in article 28, on top of the surcharge for filing late.
The right sequence is therefore:
- Work out each amount of tax and each surcharge before filing anything.
- File and pay the debts that cannot be deferred.
- File the income tax return and, in the same act, apply to defer whatever results.
The surcharge, and the discount lost without a bank guarantee
The 2024 income tax return was due by 30 June 2025. Filed on 5 October 2026, it is more than twelve months late: a 15 % surcharge and, under article 27.2, interest from the day after the twelve months. The 303 and the 111 for the third quarter were due on 20 October 2025, so they are eleven full months late: a 12 % surcharge.
Article 27.5 reduces the surcharge by 25 % if the debt is paid on filing. When it is deferred, that reduction is only kept if the deferral is granted with a bank guarantee or a surety insurance certificate. A deferral with the guarantee waived, which is the usual arrangement below 50,000 €, means losing that 25 %.
With a late-payment interest rate assumed to be 4 % a year, purely for the example:
| Debt | Tax | Surcharge if paid on filing | Surcharge if deferred without a guarantee | Interest for the delay |
|---|---|---|---|---|
| Income tax 2024 | 5,200 € | 585 € | 780 € | About 54.71 € |
| 303 for Q3 2025 (part collected) | 1,200 € | 108 € | Cannot be deferred | No |
| 303 for Q3 2025 (part not collected) | 600 € | 54 € | 72 € | No |
| 111 for Q3 2025 | 420 € | 37.80 € | Cannot be deferred | No |
Deferring without a guarantee costs Daniel 213 € more in surcharges, 195 € on the income tax return and 18 € on the uncollected VAT, plus the late-payment interest on the deferral itself. With twelve monthly instalments and the assumed rate, that interest would come to around 130 €. In total, about 340 € for spreading 5,800 €.
If a bank will lend him 5,800 € over twelve months for less than that figure, it will probably work out cheaper to take the loan and pay everything on filing. That is not always so, and a loan carries its own risks, but the comparison is made before choosing the box.
If you have several late returns and want to know which part can be deferred and what each option costs, the voluntary correction form collects what is needed to do the calculation.
Daniel's figures, in order
- On 5 October he pays the 1,200 € of VAT collected and the 420 € of withholdings: 1,620 €.
- He files the 2024 income tax return and with it applies to defer the 5,200 €, together with the 600 € of uncollected VAT, with the supporting evidence.
- He has 880 € of his savings left for the surcharges that will be notified to him later and for the first instalment.
- The surcharges on the 303 and the 111 will reach him as separate assessments, each with its own payment deadline. By paying them within that deadline he keeps the 25 % reduction on those two debts, because he paid them on filing.
A schedule that can be kept
Deferral is granted when the difficulty in paying is temporary, under article 65.1, and the proposed schedule has to be credible. This is where people fail through optimism: Daniel earns a lot in summer and almost nothing in winter. A schedule of twelve equal instalments of 483 € forces him to pay the same in February as in August.
What you need to know about a default is what article 54.2.b) of the Collection Regulation says for debts that were in the voluntary period: if an instalment is not paid, that instalment goes to enforcement with its surcharge; and if it is not paid within the period opened by the enforcement order either, all the remaining ones are treated as due. Everything is not lost at the first slip, but the second one does drag everything down with it. We explain it in more detail in if I miss an instalment.
That is why it is better to propose a schedule with higher instalments in the months with more income, even if the total term is the same, than a flat one that breaks in the first winter.
What deferral does not do
- It does not avoid the surcharge for filing late. That surcharge exists from the moment the return is filed outside the deadline.
- It does not suspend the obligation to file. What is deferred is the payment of what has already been declared.
- It does not work for the debts on the 111 or for VAT collected, however well the lack of cash is justified.
- It does not turn a surcharge into a penalty or the other way round. If there was already a request before filing, deferring the debt does not change the nature of what is paid.
If the total debt exceeds 50,000 €, the application needs a guarantee, and how debts are added together for that threshold is in up to what amount you can defer without a guarantee. The details of the order between correcting and deferring are in deferring a debt for a year I am going to correct.
Filing the late years and splitting whatever results into instalments are prepared together in Salama Tax's voluntary correction service; if the debt is already at the enforcement stage, the starting point is the deferral service.