Article provided by Yvette Jacobs-Lee, Partner at Moore Kingston Smith for Beacon Gainer, private wealth advisory services group.
HMRC to extend to all taxpayers and not just the self-employed. The chancellor announced last month that self-employed individuals would be able to defer their self-assessment tax payment on account due on 31 July 2020 by six months to 31 January 2021.
The reference to “self-employed” meant that this measure would not apply to those without self-employment income so buy-to-let landlords and those with investment income would not have benefitted from this automatic deferral of their tax payment.
The guidance has been updated now to say, “You do not need to be self-employed to be eligible for the deferment” so the deferment is now available to anyone with tax to pay under self-assessment.
HMRC have also confirmed that, “no penalties or interest for late payment will be charged if you defer payment until January 2021” so there is no financial cost incurred when relying on this deferral. However, if the deferred payment is not made by 31 January 2021, based on the current announcement, there is a risk that HMRC will reinstate the late payment interest that would otherwise be waived.
The full announcement is here.
These announcements are to be welcomed for all self-assessment taxpayers who are feeling the cash flow effects of the lockdown restrictions as a result of the COVID-19 threat. Although short term deferral is positive, taxpayers should be mindful of that a bumper tax payment will be due in January 2021 and plan their finances accordingly.
Visit our Coronavirus Hub which provides all the latest updates from the government and our own insights focused on helping businesses navigate through these unprecedented times.