Deferral of Income Tax Payments as a result of Coronavirus (COVID-19)
As you will have seen, the Government has announced a series of unprecedented measures to support both individuals and businesses alike in response to the economic threat posed by Covid-19.
In particular, for individual taxpayers who complete an annual self-assessment tax return, HMRC has announced that your second payment on account of Income Tax for 2019/20, due on 31st July 2020, can be deferred until 31st January 2021.
It is important to note that this deferral will apply to all taxpayers, not just the self-employed. So, if you receive investment income, such as dividends and savings interest, you can, therefore, benefit from this measure.
The deferral is both automatic and optional. No prior application is required. Some people may prefer to make their July payment on account as normal to avoid a larger Income Tax liability in January 2021.
If you are eligible and plan to take up this deferral option, and normally pay your 31st July payment on account by direct debit, you may wish to consider cancelling this direct debit well in advance of the 31st July 2020 payment deadline.
The self-assessment deadline for 2019/20 tax returns remains unchanged. Taxpayers who anticipate experiencing short term cash flow problems because of the economic shock of Covid-19 may benefit from submitting their 2019/20 tax return as soon as possible after the 5th April 2020 to aid in planning for their tax liability due on the 31st January 2021, or to benefit earlier in the year from any tax rebate that may be due back from HMRC.
If you would like to discuss the deferral on income tax payments further, please contact Ashtons Legal on firstname.lastname@example.org or call 0330 404 0733 and ask to speak to a member of our Tax & Trusts team.
We will be happy to talk all of this through with you by telephone, or using video conferencing via Microsoft Teams, FaceTime or WhatsApp. Of course, once the Coronavirus lockdown is over we will be able to meet with you in one of our offices.
This information is correct at 10.30am on 30 March 2020.
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