As part of the Government’s Winter Recovery Plan, the Chancellor, Rishi Sunak announced a number of measures to support the economy through the ongoing Coronavirus pandemic. These included a deferral of Self-assessment tax payments for 2020 and 2021. To view a helpful summary of the Government’s plan, click here.
The Recovery Plan confirmed that both the July 2020 and January 2021 self-assessment payments on account could be deferred until January 2022, with a cap of £30,000 on the amount deferred.
We can now add some meat to the bones of this announcement:
- The first July 2020 deferral was automatic and was interest-free
- To defer payments beyond January 2021, you need to set up a ‘Time to Pay’ arrangement via your government gateway login for amounts up to £30,000
- The repayment is by instalments rather than a lump sum at the end, and it’s now been confirmed that the instalments do carry interest
Don’t forget, you are still required file your 2019/20 tax return by 31st January 2021 to avoid a fine and it is a requirement of taking advantage of the Time to Pay facility that your return is filed on time. It is also critical to factor the new tax timetable of payments into your cash flow planning, and to consider making payments towards any arrears building up, or at least to set up a separate bank account to “earmark” funds for later payment of tax.
Any queries or worries? Get in touch with the experts at CRM on 01865 379272.
