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Self Assessment Payment Plan

The deadline for paying outstanding tax liabilities or setting up a Self Assessment payment plan is the 1st April. This will avoid incurring penalty charges for Self Assessment.

Last month, HMRC said that due to the impact of the COVID-19 pandemic, they were giving Self Assessment taxpayers more time to pay their tax or set up a payment plan without facing a 5% late payment penalty charge, as long as arrangements were in place by midnight on 1st April.

Those who have yet to settle their liabilities for the 2019 to 2020 financial year can pay their tax bill or set up a monthly payment plan online at GOV.UK. They can pay online, via their bank, or by post. Alternatively, setting up a Time to Pay arrangement allows taxpayers to spread the cost of their Self Assessment tax bill into monthly installments until January 2022.

If you can’t pay your tax bill

Anyone worried about paying their tax and unable to set up a payment plan online should contact HMRC on 0300 200 3822.

Almost 117,000 taxpayers have set up a self-serve Time to Pay arrangement online, totalling more than £437 million.

There is no change to the payment deadline and other obligations are not affected. This means that:

The payment deadline remains 31st January 2021 and interest will be charged on late payment. The current rate of late payment interest is 2.6%

A 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2021. Further late payment penalties are charged at 6 and 12 months on tax outstanding where a payment plan has not been set up. Self Assessment taxpayers who are required to make Payments on Account and know their 2020 to 2021 tax bill is going to be lower than in 2019 to 2020 – for example due to loss of earnings because of COVID-19 – can reduce their payments. Visit GOV.UK to find out more about Payments on Account and how to reduce them.

If you have further questions regarding Self Assessment then contact AJR & Co Ltd.