Paying Tax Due Under Self-Assessment

The deadline tax payments for self-assessment are:-

• 31 January 2021 for the balancing payment of tax due for 2019/2020 and any first payment on account for 2020/2021
• 31 July 2021 for the second payment on account for 2020/2021

Note if a taxpayer delayed making their second payment on account for 2019/2020, originally due on 31 July 2020, because of Coronavirus (COVID-19), this will be added to amount due for 2019/2020 payable by 31 January 2021.  HMRC will not charge interest for the late payment of the second payment on account for 2019/2020 provided it is paid by 31 January 2021.

Time To Pay Due to the Pandemic

Due to the pandemic, HMRC have recognised that some taxpayers may struggle to make lump sum payments that are due at the end of January 2021.

They have therefore confirmed that, provided certain conditions are met, they will automatically allow a taxpayer to set up a payment plan to spread the amount due over a maximum of 12 months to January 2022.  Note this only applies to the tax due for payment by 31 January 2021.

The conditions are:-

• the taxpayer owes £30,000 or less
• the taxpayer does not have any other payment plans or debts with HMRC
• the taxpayer’s tax returns are up to date. The 2020 tax return must have been lodged.  Note it takes the HMRC system at least 24 hours to recognise that we have lodged a Return for a client online.  It can also take us a day to lodge a return once a client has returned their signed page depending on other work commitments. 
• It is less than 60 days after the payment deadline

Note that HMRC will charge interest until the tax due is settled in full.  The current rate of interest is 2.60%.

There are two ways a payment plan can be set up:

1. Online

https://www.gov.uk/pay-self-assessment-tax-bill

You will need to set up a Government Gateway ID if you have not already done so to access the online service. This is a quick and simple process that you will be prompted to follow if need be.

2. By calling the HMRC payment support service

Telephone: 0300 200 3822 (Monday to Friday, 8am to 6pm (closed on bank holidays)

It can be hard to get through to HMRC as their lines can be busy.  Calling early or later in the day are usually quieter times.  Making the application online will almost certainly be quicker.

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.