You will be aware that HMRC allowed Self Assessment taxpayers struggling to pay their 2019-20 tax bill due to coronavirus (usually due by 31st July 2020) to opt to settle the majority of this on 31st January 2021 instead.

For people with cashflow issues this will have been a welcome respite, however if you took advantage of this deferral you will now be starting to think how you are now going to pay this as January approaches.

As part of the Winter Economy plan, further provisions to help those with self-assessment tax liabilities for 2019-20 are now available.

From 1 October, enhancements to the ‘Time to pay’ scheme will allow many to apply online to spread their remaining 2019-20 bill over a further 12 months from 31 January 2021.

HMRC has emailed taxpayers direct about this option over the last couple of days.

Time to Pay online application

If you meet the following criteria an application for a ‘Time to Pay’ agreement for your self-assessment bill can be made online, as soon as you have completed your tax return for 2019-20.

To use the online service, taxpayers must meet the following requirements:

  • Their outstanding 2019/2020 Self-Assessment tax bill must be between £32 and £30,000
  • All their tax returns should be up to date with no outstanding tax returns
  • They must not have other tax debts outside of self-assessment
  • They must not have other HMRC payment plans set up
  • The tax payment is no more than 60 days overdue.

This service will allow you to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

Setting up a ‘Time to Pay’ arrangement in this manner will not protect you from interest charges – interest will be applied to any outstanding balance from 1 February 2021 –but it will help to protect from late payment penalties.

Application by phone  

For taxpayers who don’t meet these requirements – or who will need longer than 12 months to settle their 2019-20 self-assessment tax bill – you might still qualify for Time to Pay agreement, but will need to call HMRC to set this up rather that apply online.

Details of how to access support for self-assessment and other taxes can be found on GOV.UK 

You can also talk to our tax team here.

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