As the tax return deadline of 31st January approaches, self-assessment taxpayers need to be preparing to pay their personal tax bills. If you chose to defer your July 2020 payment on account (an option offered by HMRC following the first lockdown), the amount due may be higher than you would normally expect to pay in January.
What You Can Do To Help With This
Part of your tax due will be a payment on account for the current 20/21 tax year. This is based on the assumption that your income in the 20/21 tax year will be the same as your 19/20 income. For those whose income has been affected by COVID there will be an opportunity to reduce the payment on account.
Something to keep in mind is that any payments received via either the Self-Employed Income Support Scheme (SEISS) or the Coronavirus Job Retention Scheme (CJRS) will form part of your taxable income.
If after reducing your payment on account, you cannot afford to pay the amount due in one instalment, you can apply to HMRC for a ‘time to pay’ arrangement to spread the cost over 12 months.
Please note you must apply for this scheme yourself, HMRC will not allow Kay Johnson Gee do it for you. You will need to have your UTR and P60 to hand.
Interest will apply from 1st February 2021 – the current rate is 2.6% – you may need to provide evidence of your inability to pay and that you have explored all options including the BBLS (Bounce Back Loan Scheme) and CBILS (Coronavirus Business Interruption Loan Scheme). For more information on the loan schemes contact Steven Lindsay on 0161 832 6221 or [email protected].
Deferral Of VAT Liabilities
If you chose to defer your VAT liabilities for the period 20th March and 30th June 2020 – the deferred amount is due for payment by 31st March 2021. You can pay by the due date or apply online to spread the cost across instalments.
The application portal for this further deferral is not yet open.
There will be no interest charged on deferred VAT payments providing you adhere to the agreed payment plan.