In October HMRC announced the Time to Pay service, which allowed self-assessment customers to spread the cost of their tax bill into monthly payments.
The online self-serve service was brought in to help ease any potential financial burden due to the coronavirus pandemic.
For deferrals made for any tax liabilities due by July 31, 2020, these must be paid by January 31, 2021.
The balancing payment for tax year 2019/20 plus first payment on account for 2020/21 also will be due on January 31, 2021.
Once you have completed your tax return for the 2019-20 tax year, you can use the online self-serve 'Time to Pay' service through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.
If you wish to set up your own self-serve 'Time to Pay', you must meet the following requirements:
• No outstanding tax returns
• No other tax debts
• No other HMRC payments 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.
If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.
If you set up a 'Time to Pay' arrangement, you will have to pay interest on the tax paid late.
Interest will be applied to any outstanding balance from February 1, 2021.
Nick Charnley, tax manager at Ellis & Co said: “It’s great that individual taxpayers have the option to spread their self-assessment tax burden over 12 months during these difficult times but, they should also be mindful that late payment interest will still accrue until the liability is paid in full.”
Ellis & Co Chartered Accountants and Business Advisers, Chester & Wrexham - 01244 343504, email@example.com