By Mel Hackney
This year could be more important than ever to know what liabilities you may face in January, with many businesses and individuals facing cash flow issues due to Covid.
HMRC announced in March 2020 that they would waive interest on the taxpayer delaying their second payment on account towards 2020/21 tax year from the usual due date on 31 July 2020 to 31 January 2021.
However, this delay means that taxpayers may need to make a significant payment to HMRC by 31 January 2021, which means finding out the final 2019/20 liability through the prompt completion of self-assessment is key this year.
If the taxpayer is unable to make the full payment due on 31 January 2021, they should consider a time to pay arrangement with HMRC.
In September 2020 it was announced that, if the taxpayer is unable to make the full payment due on 31 January 2021, they can consider a time to pay arrangement. This is applied for through one of two ways, depending on the level of outstanding liability.
Self-assessment taxpayers who have a payment to make in January of up to £30,000 can use a self-service facility in order to agree a plan with HMRC to spread their payment over 12 months, where as those with liabilities of more than £30,000 can also access time to pay to spread their payments, but they must contact the time to pay helpline to do so.
If you have not completed your personal tax return yet, get in touch and we can help.