SELF ASSESSMENT TAX LIABILITY TIME TO PAY ARRANGEMENTS

SELF ASSESSMENT TAX LIABILITY TIME TO PAY ARRANGEMENTS

In the Chancellors ‘Winter Economy Plan’ he confirmed that tax payers in self-assessment who have been affected by COVID-19 can apply online for a time to pay arrangement for tax liabilities due for payment by 31 January 2021. We understand that this will cover the following:

  1. 2019/20 second payment on account (normally due for payment 31 July 2020 but automatically deferred until 31 January 2021)
  2. Balancing payment 2019/20 (normally due by 31 January 2021)
  3. First payment on account 2020/21 (normally due by 31 January 2021)

It may be possible to settle these tax liabilities over the 12 months to 31 January 2022. If agreed then penalties will not be charged but late payment interest is likely to accrue.

The following conditions must be met to apply:

  • no outstanding tax returns. Your 2020 tax return must have been filed to set up the arrangement.
  • no other tax debts.
  • no other HMRC payment plans set up.
  • your Self-Assessment tax bill is between £32 and £30,000.
  • it is no more than 60 days since the tax was due for payment.

These time to pay arrangements are not guaranteed and will be considered by HMRC on a case by case basis. Until your tax liabilities are known it is not possible to consider applying. We would therefore advise that you complete your 2020 Tax Returns as soon as possible to be prepared and know your options.

If you do not meet the conditions above and still wish to set up a time to pay arrangement you will need to call HMRC directly once your 2020 tax return is complete. The online application only applies to liabilities due 31 January 2021. If you wish to discuss arrangements for other liabilities you will need to call HMRC.

Please contact a member of the tax team before speaking directly with HMRC.

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SELF ASSESSMENT TAX LIABILITY TIME TO PAY ARRANGEMENTS