Personal Tax return changes as a result of COVID-19

Published 8 October 2020

The significant changes that took place this year as part of the Government’s support package for businesses impacted by COVID-19 included deferring the deadline to pay the second payment on account for the tax year 2019/20 from 31 July 2020 to January 31 2021. 

Further, the Chancellor announced the ability to defer payment with a 12-month Time to Pay extension, for those impacted by COVID-19. This now means that those payments deferred from July 2020 and those due in January 2021 will now be able to be spread over the next 12 months subject to HMRC agreement, under a Time to Pay arrangement.

So, when will you now need to make Self Assessment payments?

If you don’t agree a Time to Pay with HMRC, then the July 2020 payment on account (if you deferred this and it hasn’t yet been paid) together with the balancing payment, will be due on 31 January 2021.

Alongside this, you will also be required to make your first payment on account for the 2020/21 tax year (which is calculated at 50% of your 2019/20 tax liability). Effectively you will be paying the equivalent of a whole years’ tax in one go under this scenario.

If you have been impacted by COVID-19 and do agree a Time to Pay extension with HMRC, then the July 2020 payment on account (if not already paid) and the balancing payment from 2019/20 can be paid in 12 monthly instalments before 31 January 2022.

As it stands, you will still have to pay your first payment on account for the 2020/21 tax year. To facilitate this, a tax return will need to be submitted and a Time to Pay agreement reached.

As always, get in touch and we can work out exactly what this means for you. 

enquiries@cbslgroup.com