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Deferring a Self Assessment Payment on Account

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Given the current economic climate, money is tight for many people. As part of the Government’s plans to support those most affected by the lockdown, allowances have been made that mean your second self assessment payment on account for the 2019-2020 tax year can be deferred, so long as you are registered in the UK for Self Assessment. You will not be charged any interest, nor will you be penalised for not paying, until the 31st January 2021. 

Deferring the Payment

If you do decide to defer, interestingly, you do not have to tell HMRC. The deadline for paying the second payment is simply shifted to 31st January 2021. Remember though, that during this period you may also be required to pay any other balance remaining for the 2019-2020 tax year and the 2020-2021 tax year’s first payment on account. 

As usual, there are a number of ways to pay, which allow you to spread out the cost if you need. If you want to pay the entire amount in one go, simply use the Government’s online service. If you are paying your tax through HMRC’s ‘Time to Pay’ arrangement, it is possible for you to add your second payment on account to this. However, you will need to make the organisation aware that this is what you intend to do. If you have no other outstanding balance owing, you can still pay in installments using a payment plan. You can either do this online or by calling HMRC’s support office. Some taxpayers usually opt to make their payment on account by Direct Debit. If you’re one of them, but you’ve decided to defer your payment, you are advised to cancel your Direct Debit so that HMRC does not inadvertently take a payment. 

If you require any of the other economic support options which are available from HMRC, your payment deferral will not alter your entitlement to these. 

If you are able to make your payment now, HMRC still recommends doing so, rather than deferring. The deferral process is entirely optional; it is not automatic, as some initially thought.  

‘Enforcement Action’

After the 31st January 2021, you will be expected to have made your second payment on account. After this, you will be penalised for failing to pay. Interest will also accrue on these missed payments. If you still cannot pay and owe less than £10,000, you should contact HMRC to find out about the ‘Time to Pay’ scheme. If you fail to pay your tax, there are a number of actions HMRC can take to get the money you owe. They may do this through debt collectors, by making collections through your salary, by taking money from one of your bank accounts or by taking you to court. These are all very difficult situations to be in and can be very stressful. Avoid these issues by ensuring you pay the tax you owe by the deadline and contacting HMRC directly if you are unable to do so. If you have contacted them with your issues, they are more likely to be lenient. 

MCC: Manchester Tax Advisors

If you have any further questions about any aspect of the self-assessment process, please do not hesitate to contact the team at Manchester tax advisors, MCC Accountants. You may also wish to explore our range of taxation services.