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The Independent Automotive Aftermarket Federation

HMRC makes time to pay easier

Date: Thursday 02 July 2020

Our colleagues at Xecutive Search have drawn our attention to the fact that businesses and individuals struggling with tax bills can agree a repayment schedule with HMRC. This is often easier said than done but has recently been made simpler.

Deferred tax recap. You’re probably aware of the tax deferral arrangements offered by the government to all businesses and individuals for VAT and income tax respectively.

They mean that without needing to contact HMRC you can:

• defer VAT payments due before 30 June 2020 until 31 March 2021; and
• defer your self-assessment payment on account due on 31 July 2020 until 31 January 2021.

In both cases HMRC will not issue assessments, demands or penalties as long as you settle the bills not later than the deferred due date. If you expect not to be able to pay and want to spread tax over a longer period, or you need to time to pay other taxes, e.g. PAYE or corporation tax (CT), you need to apply to HMRC.

Asking for more time. Naturally, HMRC is currently more open to requests for time to pay arrangements. However, there’s still a process involved which can be troublesome. But there’s some good news for individuals who owe tax on personal or business income.

Tip. HMRC recently made changes to its time to pay procedure for self-assessment tax bills. If you owe or will soon have to pay tax of up to £10,000, you might be able to arrange a payment schedule online and so avoid awkward conversations with HMRC’s debt management unit.

Other tax bills. Unfortunately, online applications can’t be used for other types of tax, e.g. VAT, PAYE and CT. For these you’ll need to speak to HMRC. Our brief guide on what to expect and the information you should prepare will make the procedure less arduous.

If you are unable to pay your self-assessment tax on time and owe up to £10,000 you can apply online for more time to pay.