Payment On Account: Deferring the 31st July Tax Payment
Are you struggling to pay?
POSTED BY HELEN BEAUMONT ON 08/07/2020 @ 8:00AM
UK taxpayers with a liability of more than £1,000 for the year are often required to make a payment on account. These payments are due on 31st January and 31st July respectively ...
If you're deferring your July 31st payment on account, you may want to rethink your decision!
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For the last financial year, over 11 million taxpayers submitted returns to HMRC, and many of these people would be expected to make a payment on account by 31st July 2020. Early in the Coronavirus outbreak, HMRC allowed individuals to defer the 31st July payment on account.
However, it is incorrect to assume deferral is available to everyone. It is only available to those finding it difficult to make such a payment as they have been affected by Coronavirus and have lost income because of it!
HMRC is estimated to collect slightly less than £32 billion in Income Tax for the year ending 5th April 2020 via individuals submitting self-assessment tax returns. The Treasury faces a shortfall of billions from improper payment on account deferrals.
HMRC has not published specific guidance on what they define as 'struggling to pay', but they have published examples of what they consider 'adversely affected' means in the context of the Self-Employed Income Support Scheme which you can use as guidance yourself.
But remember, HMRC could ask you to demonstrate that you were struggling to pay and the SEISS adversely affected examples may be used when forming their opinion as to whether you were correct to defer or not.
"I have received a number of calls from clients wondering about deferring!"
My advice to them is always the same. If you can afford to make the 31st July payment on account on time, then you really should. If you're struggling because of genuine cash flow issues due to the Coronavirus outbreak, then consider deferring.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about deferring your payment on account, do call me on 01908 774323, leave a comment below or click here to ping over an email and let's see how I can help you.
About Helen Beaumont ...
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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