HAVE YOU PAID YOUR TAX IN FULL?
Self assessment taxpayers have less than a week left now to pay any outstanding tax liabilities in full, or set up an online payment plan for the 2019 to 2020 financial year to avoid incurring penalty charges.
Due to the impact of the Covid-19 pandemic, HMRC has given self assessment taxpayers more time to pay their tax or set up a payment plan without facing a 5% late payment penalty charge, as long as arrangements were in place by midnight on 1 April.
Those who have yet to settle their liabilities for the 2019 to 2020 financial year can pay their tax bill, or set up a monthly payment plan online at gov.uk. They can pay online, via their bank, or by post.
Alternatively, setting up a Time to Pay arrangement allows taxpayers to spread the cost of their self assessment tax bill into monthly instalments until January 2022.
The self-serve Time to Pay data is for online payment plans created between 1 October 2020 and 21 March 2021. This system allows taxpayers to set up a payment plan online to help them manage the cost of their tax bill up to £30,000. Taxpayers will be able to pay their tax bill in monthly instalments, up to January 2022.
For those with bills over £30,000, individual repayment arrangements need to be negotiated with HMRC directly. Almost 117,000 taxpayers have set up a self-serve Time to Pay arrangement online, totalling repayments of more than £437m.
Anyone worried about paying their tax and unable to set up a payment plan online should contact your accountant here at Towers + Gornall, or call HMRC for help and support on 0300 200 3822.
There is no change to the payment deadline and other obligations are not affected. This means that:
the payment deadline remained 31 January 2021 and interest is charged on late payment. The current rate of late payment interest is 2.6%
a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2021.
Further late payment penalties are charged at 6 and 12 months (August 2021 and February 2022 respectively), on tax outstanding where a payment plan has not been set up
Self assessment taxpayers who are required to make Payments on Account and know their 2020 to 2021 tax bill is going to be lower than in 2019 to 2020 – for example, due to loss of earnings because of Covid-19 – can reduce their payments.