Time is running out to set up a Time to Pay for 2019/20 self-assessment tax debt
Taxpayers had until Thursday 1 April 2021 to either pay their 2019/20 outstanding self-assessment tax bill or set up a Time to Pay (“TTP”) arrangement to avoid the initial 5 percent late payment penalty.
HMRC announced in February that self-assessment (“SA”) taxpayers would not be charged the initial 5 percent late payment penalty if they either paid their tax or made a TTP arrangement by 1 April 2021. However as the payment deadline for SA is unchanged and remains 31 January 2021, interest will be charged from 1 February 2021 on any amounts outstanding.
An enhanced self-serve TTP facility is now available for 2019/20 self-assessment tax debt. This was a recommendation of Chartered Accountants Ireland which the Chancellor announced in his September 2020 Winter Economy Plan. It allows taxpayers to spread the cost of their tax liabilities into monthly instalments until January 2022. This can be done online, for amounts up to £30,000.