Coronavirus (COVID-19) and delaying tax payments

In light of the Coronavirus (COVID-19) pandemic the UK Government announced a number of measures to assist tax payers through these unprecedented times. One of these was the deferral of tax payments on account due on 31 July. Initially, there was some confusion over who would be eligible for this tax deferral and how it should be claimed. There is now more clarity over the rules.

Is the relief only available to self-employed taxpayers?

HMRC has now updated its advice for businesses and individuals affected by Coronavirus to make clear that the six-month income tax self-assessment deferral for payments due in July applies to all taxpayers in self-assessment, and not just those who are self-employed.

How long is the tax deferral for?

At present HMRC have advised that all tax for the 2019/20 tax year will be due for payment by 31 January 2021. Taxpayers will need to keep this in mind and manage their cashflow to meet the tax payment when it does fall due. Further updates on this may be announced if the current isolation and social distancing rules continue for longer than the initial three-month period.

How do I demonstrate my eligibility?

If you are due to make a self-assessment payment on account on 31 July 2020 then you are eligible for the deferral. The deferral is intended to assist all self-assessment taxpayers who are suffering hardship as a result of Coronavirus. Trusts will also fall into this category as self-assessment taxpayers.

Can I make a tax payment in July if I want to?

This tax deferral is optional and taxpayers are still able to make their second self-assessment payment on account on 31 July 2020 should they wish to. Some taxpayers want peace of mind that their tax has been paid in advance of the deadline and would prefer to avoid a larger balancing payment, which will otherwise be due on 31 January 2021.

How do I claim the deferral?

This is an automatic deferral with no applications or claims required. No penalties or interest for late payment will be charged if you simply do not make your July 2020 payment on account until 31 January 2021. Taxpayers should note that this is a deferral of the payment due and not a cancellation, so they will need to ensure that all tax due in relation to the 2019/20 tax year is paid by 31 January 2021.

HMRC have also scaled up their "Time to Pay" offer to all firms and individuals who are in temporary financial distress as a result of Coronavirus and have outstanding tax liabilities that they are unable to meet.

I am still worried and have more questions

The team at Michelmores can provide further advice, suggest suitable tax planning opportunities and offer a full, bespoke tax compliance service to assist with your filing obligations as required.

If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact Jenna Fyfe in Michelmores' Private Wealth team.


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This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.