In May, taxpayers who pay their tax through self-assessment were offered the opportunity to delay their July payment on account for the 2019-20 financial year until 31st January 2021.
This may seem a tempting option, helping with cashflow now. However, as only the last two weeks of the 2019-20 tax year came under the COVID-19 Lockdown, it is unlikely to bring the final tax bill down significantly, leaving taxpayers having to find a double payment in January.
If possible, it would be better to pay the July payment for 2019-20 now, leaving only the first payment on account for the 2020-21 tax year to pay in January. If this isn’t a possibility due to current circumstances, applying for a ‘Time to Pay’ arrangement with HMRC could be a more manageable option, by paying the July payment in instalments and clearing the bill before the January payment is due. This comes under the same offer from Government as delaying the whole payment, so there would be no interest or penalties incurred.
If you would like any advice or help with your self-assessment tax bill, please do not hesitate to contact Folkes Worton on 01384 376964.
Folkes Worton – Accounting for the Future