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Deferral of Self Assessment Payments

July 22, 2020

By Chris Moir (Head of Personal Tax)

HM Revenue & Customs (HMRC) is reminding taxpayers that anyone having difficulty paying their second 2019 to 2020 Self Assessment payment on account can take advantage deferring the payment until 31 January 2021.

HMRC has confirmed that all taxpayers, including the self-employed, due to make a payment on account can automatically defer their payment until 31 January 2021.  The second Self-Assessment payment on account for the tax year 2019/20 is normally due at the end of July.

However due to the Covid-19 disruption, HMRC has announced that payments can be deferred to support an estimated 2.7 million taxpayers in the UK boosting cash flow by a combined £11.8 billion this year.

HMRC has stated that individuals do not need to contact HMRC to defer their payment on account and simply not paying notifies them of your intent to defer the payment. 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.

However, 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 three separate payments are due all at once.”

The measure forms part of the Covid-19 rescue package for self-employed individuals, which also includes the Self Employment Income Support Scheme (SEISS). Now in its second and final term, the SEISS will pay self-employed taxpayers 70 per cent of their average monthly profits for lost income between June and August 2020.

To be eligible for SEISS, you must have submitted a tax return in the 2018/19 tax year, have traded in the 2019/20 tax year, earn less than £50,000, and earn at least half of your income through self-employment.

For any advice or assistance please contact Chris Moir (Head of Personal Tax)

t: 0191 256 9500



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