Self-employed taxpayers due to make a payment on account can automatically defer the payment until 31 January 2021, it has been confirmed.
The second Self Assessment payment on account for the tax year 2019/20 is usually due at the end of July.
But due to Covid-19 disruption, HM Revenue & Customs (HMRC) has announced that payments can be deferred to support the 2.7 million self-employed working in the UK, boosting cash flow by a combined £11.8 billion this year.
Commenting on the announcement, the tax office said the self-employed will not need to contact HMRC to defer their payment on account, as simply not paying notifies them of your intent to defer the payment.
However, Self Assessment taxpayers should “think carefully about whether deferral is right for them”.
“It’s important to remember that the deferred amount will be due on 31 January 2021, the same date that any 2019 to 2020 balancing payment and first 2020 to 2021 payment on account will be due. This could mean the separate payments are due all at once.”
The measure forms part of the Covid-19 rescue package for self-employed individuals, which also includes the Self Employment Income Support Scheme (SEISS). Now in its second and final term, the SEISS will pay self-employed taxpayers 70 per cent of their average monthly profits for lost income between June and August 2020.
To be eligible, you must have submitted a tax return in the 2018/19 tax year, have traded in the 2019/20 tax year, earn less than £50,000, and earn at least half of your income through self-employment.
For personal tax support, please get in touch with our expert team today.
Smailes Goldie Group
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