Deferral of tax payments

Published by Daniel Grainge on 3 November 2020

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Last updated 3 November 2020

On 20 March the Chancellor announced that Income Tax Payments on Account that were due to be paid by 31 July 2020 will no longer have to be paid on that date, and instead will be deferred until 31 January 2021.

This deferral is automatic – there is no need to apply to, or notify, HMRC.

No interest or penalties will be charged during this deferral period.

This deferral applies to all taxpayers who pay their tax via the Self-Assessment system, not just those who are self-employed.

If your taxable income for 2019/20 is going to be lower than in 2018/19 there may be the opportunity to reduce your payments on account, and potentially claim a refund of tax already paid.

If you are self-employed there are extended Time to Pay arrangements available for PAYE and National Insurance liabilities, and an automatic deferral of VAT payments.

If you are not able to pay your Income Tax for 2019/20 in full by 31 January 2021 you can arrange to pay by instalments. These instalments can be arranged once you have submitted your 2019/20 Tax Return.  If you owe up to £30,000 the Time to Pay instalment application can be made online to HMRC.  For higher tax bills you would need to contact HMRC directly.

For further information and guidance, please get in touch.

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