Anyone who has difficulty paying their second 2019 to 2020
Self Assessment payment on account can take advantage of
automatically deferring the payment until 31 January
2021, HMRC is reminding
taxpayers.
The second Self Assessment payment on account for 2019 to
2020 is ordinarily due at the end of July, but the
government previously announced it is supporting the
self-employed and others by allowing them to defer this
payment.
This option to defer is on top of additional support for
the self-employed through £7.8 billion in grants paid
through the Self Employment Income Support Scheme.
The payment on account deferral will give immediate support
to businesses and individuals by keeping cash at their
disposal during this extraordinary time of uncertainty.
To make this as hassle-free as possible customers will not
need to contact HMRC to defer their
payment on account - they opt into the deferral by simply
not paying their tax bill due by 31 July 2020.
If no payment is received, HMRC will
automatically update their systems to show payment has been
deferred and no interest or penalties will be incurred,
providing it is paid in full by 31 January 2021.
The only action customers may need to take is to cancel
their direct debit if they have one set up for their
payments on account.
Angela MacDonald, HMRC’s Director General of
Customer Services, said:
We want to support taxpayers as much as possible as they
face uncertainty and difficult circumstances. That’s why
we want to remind those who may struggle to pay a tax
bill right now that they have the option to defer their
Self Assessment payment.
They don’t need to do anything to take advantage of this
deferral. By simply not paying, HMRC will know they
have deferred and we will do the rest.
A projected estimate based on 2019 to 2020 Self Assessment
receipts suggests that the July payment deferral will
provide up to a £11.8 billion cash flow boost to taxpayers.
Around 2.7 million taxpayers are eligible for deferral.
Self Assessment taxpayers should think carefully about
whether deferral is right for them. It’s important to
remember that the deferred amount will be due on 31 January
2021, the same date that any 2019 to 2020 balancing payment
and first 2020 to 2021 payment on account will be due. This
could mean 3 separate payments are due all at once.
They may wish to contact HMRC about paying
these combined amounts in installments if they have
difficulty in paying them all in full at once.
Payments on account are payable by Self Assessment
taxpayers by 31 January and 31 July each year, unless:
- their last Self Assessment tax bill was less than
£1,000
- they have already paid more than 80% of all the tax
they owe at source, for example through their tax code.
Each payment on account is estimated, based on 50% of the
previous year’s Self Assessment tax bill and they are
advance payments towards the current year’s tax bill.
Guidance on
deferring your Self Assessment payment on
account is available on GOV.UK.
Payments on account include Income Tax, Class 4 National
Insurance contributions where applicable, but not student
loan repayments or Capital Gains Tax.
The July 2020 payment on account deferral applies to all
those businesses and individuals who have registered for
Self Assessment and who make payments on account – no
sectors or businesses are excluded from applying the
deferral.
