Given the current situation, HMRC are allowing the Payment on Account due on 31st July 2020 to be deferred.
No penalties or interest
HMRC say that if you’re registered in the UK for Self Assessment and may have difficulty making your 31st July 2020 Payment on Account due to the impact of coronavirus you can defer it without incurring any interest or penalties as long as you pay the amount due in full on or before 31 January 2021.
Do nothing now
If you want to take advantage of this you don’t need to apply or tell HMRC – do nothing, sit back, file your self assessment on time (on or before 31st January 2021) and pay the deferred Payment on Account (by 31st January 2021).
Deferring this Payment on Account will not stop you from being entitled to other coronavirus support that HMRC provides.
Other tax to pay
On 31st January 2021, as well as the deferred 31st July 2020 Payment on Account, you may also need to pay:
- Any balancing payment due for the 2019 to 2020 tax year which will be shown on your tax calculation when you prepare the self assessment for 2019 / 2020
- The first payment on account due for the tax year 2020 / 2021 as usual
Pay it now
If that all sounds like you’re building up a big tax bill, and you do have the money available, then you can just make the 31st July 2020 Payment on Account as normal.
Or you can pay it in full any time between 31st July 2020 and 31st January 2021.
Doing it by instalments
You may prefer to make instalment payments. If you do not owe any other tax that you’re paying through a “Time to Pay instalment arrangement” then you can arrange an instalment plan online – click here.
Otherwise you will need to contact HMRC to arrange for time to pay – click here.
If you do have a direct debit set up for your tax payments and do not want to make the 31st July payment then don’t forget to cancel the Direct Debit otherwise the payment will happen automatically.
At the end
Once the deferment period is finish HMRC will charge the usual interest and penalties as well as applying their collection procedures to missed payments.