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The government is allowing those in self-assessment to spread payments over twelve months. What’s the story?
Those in self-assessment were able to defer their July 2020 payment on account until 31 January 2021, if they were struggling to pay because of coronavirus.
In recognition of the ongoing pandemic, this is being extended further for individuals who are due to pay up to £30,000 in tax by 31 January 2021. Eligible individuals will be able to use HMRC’s”Time to Pay” service to pay over an additional twelve months. It is not yet clear whether the £30,000 threshold will include the first payment on account for 2020/21, which is also due by 31 January 2021.
To use the “Time to Pay” service taxpayers will need to call HMRC to discuss their assets and the reasons they can’t pay on time. Detailed guidance has not yet been published, but it would be easier for everyone involved if the arrangement applied automatically to those that are eligible, as it did with the deferral of the July payment.
Tip. File your 2019/20 tax return as soon as possible to determine whether you have an extra twelve months to pay.
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