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The government has announced that Self Assessment payments which were deferred earlier this year can now be paid through a Time to Pay payment plan.

If you deferred paying your July 2020 Payment on Account, the deferred amount will now be due for payment by 3‌1‌‌ ‌‌January 2021. This will be in addition to any balancing payment and the first 2020/21 Payment on Account, meaning it may be a larger payment than you usually pay in January.

If you are unable to pay your Self Assessment (SA) bill in full by 31‌‌ January 2021, you can set up a Time to Pay payment plan of up to 12 months online.

If you are an employer and have Self Assessment tax debts of up to £30,000, you will be able to access this Time to Pay facility through GOV‌.UK and will get automatic and immediate approval. If your Self Assessment debts are over £30,000, or you need longer than 12 months to repay their debt in full, you can still be able to use the Time to Pay arrangement but you will need to call HMRC to arrange it.

HMRC has also confirmed that SA taxpayers will not be charged the 5% late payment penalty if pay their tax or set up a payment plan by 1 April 2021.

The payment deadline for SA was 31 January and interest is charged from 1 February on any amounts outstanding. Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the Covid-19 pandemic, HMRC are allowing additional time to pay or set up a payment plan.

For help and advice on the government’s COVID-19 support schemes, please contact Ann Bibby on abibby@ellacotts.co.uk or 01295 250401.