Enhanced time to pay for those in SA!

As part of his Winter Economy Plan on 24 September 2020, the Chancellor announced enhanced time to pay arrangements for Self Assessment (SA) taxpayers who are unable to pay their tax due by 31 January 2021.  The amount due can be paid in monthly instalments over a period of up to 12 months.

These enhanced payment arrangements apply to all payments due by that date including:

• Any deferred second payment on account for 2019/20 (originally due 31 July 2020).

• The balancing payment for 2019/20, due 31 January 2021.

• The first payment on account for 2020/21, due 31 January 2021.

If you meet the following requirements you can set up a time to pay arrangement  using the ‘Self-Serve Time to Pay’ service through GOV.UK:

• You have no outstanding tax returns. The 2019/20 tax return must have been filed and processed by HMRC.

• You have no other outstanding tax or existing HMRC payment plans.

• The amount due must be between £32 and £30,000.

To avoid late payment penalties the payment plan must be set up by the usual commencement date for late payment penalties, being 30 days after the usual due date, so 2 March 2021.  The final deadline for setting up the payment plan is 60 days after the due date, therefore 1 April 2021.

Interest will still be charged from 1 February 2021. This contrasts with the July payment on account deferral, which was interest free.

If you owe more than £30,000, or need longer than 12 months to pay, you should call HMRC’s payment helpline on 0300 200 3822.

The online time to pay service is not available to agents, however if you need any advice then please speak to your usual Whiting and Partners contact.

Disclaimer - All information in this post was correct at time of writing.