As part of the government support package to deal with the COVID-19 pandemic, Income Tax payments on account due in July 2020 under the Self Assessment system may be deferred to January 2021.

At a glance

Payments on account of Income Tax due under Self Assessment are due on 31 January, during the tax year, and 31 July following the end of the tax year.

The second payment on account for the 2019/20 tax year is due by 31 July 2020.

HMRC have announced that:

  • The July 2020 payment may be deferred until 31 January 2021.
  • This is an automatic offer with no applications required.
  • No penalties or interest for late payment will be charged in the deferral period.

Originally badged as applying to the self-employed only, the government has since amended their guidance and it now includes all taxpayers due to make Self Assessment payments on 31 July 2020 including landlords.

Anyone who wishes to make their payment by 31 July may still do so. It may be that this figure now needs to be recalculated if income levels have dropped since the last payment was made on 31 January.

Claims to reduce payments on account

  • We note also that businesses who know that their 2019/20 profits are going to be less than the previous year can still make claims to reduce their payments on account.
  • Going forward it is likely that many businesses will also see a drop in profitability in the 2020/21 tax year. The first income tax payment on account for 2020/21 will be due on 31 January 2021, businesses should monitor their position as we reach the end of 2021 and make an appropriate claim if necessary.

Links

COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.

Penalties: PAYE: late payment
Our free summary examines how late payments are charged and how to appeal.

External links

Understand your Self Assessment tax bill 

If you cannot pay your tax bill on time 

Coronavirus (COVID-19) Business support

 

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