Spread your Self Assessment tax bill

According to the government’s Winter Economy Plan, taxpayers are allowed to spread their payment over an additional 12 months from 31 January 2021 via an online self-service Time to Pay facility.

The taxpayers can use the Time to Pay service when their tax bill is between £32 and £30,000 – provided they don’t have:

• any existing tax debts or payment plans already set up,
• tax returns are up to date,
• it is no more than 60 days since the tax was due for payment

The online payment plan service was already in place for tax liabilities up to £10,000, but this has now increased to £30,000 for Self Assessment taxpayers, to help ease the financial impact of the coronavirus pandemic. This can be set up via online self-service, but taxpayers who need longer than 12 months to settle their tax bill can still contact HMRC in the usual way.

Once a tax return for the year 2019-2020 is completed, the taxpayer can set up a direct debit and pay the tax owed in monthly instalments, up to a 12-month period. The majority of self-employed people will qualify for this service and can make the payments without even talking to an HMRC advisor.

Anyone using the facility will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

Please contact us if you’d like to learn more about this service and think are eligible.

As the deadline of making second payment on account on 31 July approaches, we’d like to remind you of some other important dates and deadlines this tax year.

If you need any help, clarifications and guidance with these dates, let us know. All the financial and accounting vocabulary used by HMRC can sound overwhelming and confusing, but we can explain everything in an accessible, supportive way and help you with all your self-employment needs.

31 July 2019 – the deadline for making second ‘payment on account’ to HMRC. This is applicable if you were self-employed inr 2017-18 tax year, owing tax of over £1,000 when you submitted your tax return for this period.

5 October 2019 – is the deadline for registering for Self Assessment if you’re self-employed or a sole trader, not self-employed, or registering a partner or partnership

31 October 2019 – the Self Assessment deadline for the tax year 2018-19 for a paper return rather than filing online. However, most businesses are currently filing their tax return online.

30 December 2019  – the deadline for filing your online tax return if you want the tax owed to be collected through PAYE via your tax code.

31 January 2020 – the deadlines for online tax returns and for paying the tax you owe

More information on HMRC website.