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Self-assessment & VAT Tax payments

As part of the Government’s support package for businesses impacted by COVID-19 HMRC have announced that self-assessment tax payments due in January 2021 (including payments deferred from July 2020) can be paid over twelve months, under a time to pay arrangement.

To apply for the time to pay agreement, the following criteria must apply

1. The tax due must be less than £30,000.00.
2. Your 2019/20 and any previously outstanding returns must have been filed.
3. There is not already a payment plan in place
4. There are no other outstanding tax debts.
5. Repayments must be up to a maximum of twelve months.

If you decide to enter into a 12-month Time to Pay agreement, no penalties will be levied, although interest is usually charged on Time to Pay arrangements.

To arrange a payment plan, please follow the link below select ‘set up a payment plan online’ You will need your government gateway log in details to do this.

https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments

You may wish to telephone HMRC to set up a plan, there is a number on the link to do this, however, please be ready to spend a bit of time on the phone waiting to get through to HMRC.

VAT deferral

If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, you can:

pay the deferred VAT in full on or before 31 March 2021 or you can opt in to the VAT deferral new payment scheme when it launches in 2021.

If you want to opt in to the new payment scheme, you cannot opt in yet. The online opt in process will be available in early 2021. You must opt in yourself, we cannot do this for you.

Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

The scheme will allow you to:

1. pay your deferred VAT in instalments without adding interest
2. select the number of instalments from 2 to 11 equal monthly payments

To use this scheme you must:

1. still have deferred VAT to pay
2. be up to date with your VAT returns
3. opt in before the end of March 2021
4. pay the first instalment before the end of March 2021
5. be able to pay the deferred VAT by Direct Debit