VAT deferral and enhanced Time to Pay for self-assessment
The government has announced the option for these businesses to spread their payments over the 2021/22 financial year. This is part of their Winter Economy Plan. Business will be able to make 11 equal instalments over this financial year.
All business that took advantage of the VAT deferral can use the spreading scheme. Business will need to opt in and Her Majesty’s Revenue and Customs (HMRC) will put in place an opt-in process in early 2021.
Enhanced Time to Pay for self-assessment taxpayers
Taxpayers were able to defer the income tax self-assessment payment on account for 2019/20, due by 31st July 2020, to 31st January 2021.
There are also other amounts due on 31st January 2021, a balancing payment for the 2019/20 tax year and the first payment on account for the 2020/21 tax year.
Taxpayers with up to £30,000 of self-assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility. This facility secures a plan to pay over an additional 12 months. This means that self-assessment liabilities due in July 2020, and those due in January 2021, will not need to be paid in full until January 2022. Any self-assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay self-assessment helpline to agree a payment plan.
Danielle Harvey ACA of Harvey, Telford & Bates, comments on the VAT deferral and enhanced Time to Pay:
“The Winter Economy Plan enables businesses some financial support with their VAT and self-assessment tax. With the facilities and plans in place including spreading payments, this aims to alleviate self-assessment liabilities and financial worries. If you would like to talk to us at Harvey, Telford & Bates about the VAT deferral or Time to Pay please get in touch with our expert team.”
If you would like guidance or advice on this subject or regarding any other queries, please call us on 01743 462604 or email us at [email protected] to schedule an appointment.