- 21st May 2020
- Posted by: Suzy Hill
- Category: Personal Tax, COVID-19 NEWS, Business News
Covid-19: self assessment payment deferrals
Taxpayers can choose how and when they can delay making a second payment on account for the 2019-20 tax year following updated guidance from HMRC
Taxpayers have the option to defer their second payment on account if they are registered in the UK for self assessment and finding it difficult to make a second payment by 31 July 2020, due to the impact of coronavirus.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it is paid on or before 31 January 2021.
Following the news that HMRC has updated its guidance on Time to Pay arrangements, Dawn Register, partner in tax dispute resolution at BDO said: ‘We welcome the news that HMRC has updated it’s guidance on Time to Pay arrangements. Also payment plans for personal tax liabilities of less than £10,000 can now be agreed online.’
Taxpayers do not need to tell HMRC that they are deferring the payment on account, and choosing to defer will not stop people from being entitled to other coronavirus support that HMRC provides.
However, the second payment on account must be made on or before 31 January 2021 if people choose to defer.
Register added: ‘Sadly, there is likely to be a ‘snowball effect’ of the tax deferrals offered by the government, particularly for business owners. With VAT and income tax deferrals, plus some have asked HMRC for extra time to pay payroll taxes.
‘While the ‘breathing space’ is helpful in a time of national crisis, it may store up bigger problems in the future if liabilities continue to remain unpaid. HMRC confirms that the usual interest, penalties and debt collection procedures will apply to missed payments.’
Other payments which may need to be paid by this date include any balancing payment due for the 2019 to 2020 tax year, and first payment on account due for the 2020 to 2021 tax year.
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