Deferral of Self-Assessment tax: COVID-19
In order to ease out the financial burden on the taxpayers, the government has loosened the self-assessment payment deadline. Taxpayers in the UK required to pay self-assessment tax and have second payment on account to be paid can choose to defer of self-assessment tax payment until 31 January. HMRC will not charge any interest or penalties on any such deferral.
All the UK taxpayers whose second payment on account liability falls due as on 31 July 2020 or those who have existing time to pay arrangement with HMRC shall be eligible for deferral.
How to defer self-assessment tax payment?
Deferral of self-assessment tax payment is an automatic offer. NO application is required.
A. If you choose to defer
There is no need to tell HMRC that you’re deferring your payment on account. You will have to make your second payment on account on or before 31 January 2021 if you choose to defer. Other payments you may have to make by this date include any:
- balancing payment due for the 2019 to 2020 tax year
- first payment on account due for the 2020 to 2021 tax year
B. If you want to pay in full
You can pay your second payment on account bill in full any time between 31 July 2020 and 31 January 2021 using the online service.
C. If you want to pay in instalments
Contact HMRC if you already have an overdue tax which you’re paying through a Time to Pay instalment arrangement and want to include your second payment on account in that arrangement.
If you do not have other overdue taxes, you can make your payment in instalments any time between now and 31 January 2021 by setting up a budget payment plan.
D. Payments made by Direct Debit
If you choose to defer and normally make your payments on account by Direct Debit, you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any payment due. You can cancel online if you’re registered for online banking.
After the deferral ends
The usual interest, penalties and collection procedures will apply to missed payments.