Self Assessment Bills – Enhanced Time-to-Pay Arrangements

The Chancellor has increased the upper threshold for online applications for ‘time to pay’ to £30,000, for those paying income and capital gains tax via self assessment.

As part of the ‘Winter Economy Plan’ announced by the Chancellor on the 24 September, the government have introduced for tax payers, enhanced payment arrangements for those who are unable to pay their self assessment tax bill, which falls due on 31 January 2021.

The enhanced payment arrangements applies to all tax due on that date, which include:
* Deferred second payment on account for 2019/20 (originally due on 31 July 2020)
* Balancing payment for 2019/20 (due on 31 January 2021)
* First payment on account for 2020/21 (due on 31 January 2021)

(Note: The amount due can be paid in monthly instalments over a period of up to 12 months.)

There are certain requirements that must be met in order for Taxpayers to be able to set up a time to pay arrangement online, these include:

* No outstanding tax returns (the 2019/20 tax return must have been filed and it must also have been processed by HMRC (it can take up to 72 hours for a return to be filed online)
* There must be no HMRC payment plans set up, or no other tax debts
* The payment plan must be set up no later than sixty days after the due date – It is worthwhile noting, to avoid late payment penalties being applied, the payment plan must be set up by the actual ‘trigger date’ for late payment penalties, which is thirty days after the due date).

Interest will be applied to any outstanding balance from 1 February 2021. This is contrary to the deferral of the second payment on account, due in July 2020, on which no interest was charged.

Taxpayers who owe more than £30,000 or who may need longer than twelve months to pay, could still be able to set up a ‘time to pay’ arrangement, by calling the self-assessment payment helpline on 0300 200 3822.

Agents, such as ourselves, are unable to access the ‘The online time to pay service’.

Please do contact us if you require any help and support by calling 0121 550 8509 or email info@godfreymansell.co.uk.

Disclaimer:
Whilst every effort in ensuring the accuracy of the content of these notes has been considered, we cannot be held responsible in any way in regards to any consequences and/or decisions arising from the information provided. For specialist advice tailored to your individual circumstances – please seek professional advice and contact us on the above details.