HM Revenue and Customs has updated its guidance so that all self-assessment taxpayers are able to benefit from an extension to the July payment date and not just the self-employed.
HMRC updated its guidance on the July payments on account deferral to make it clear that it applies to all self-assessment tax payers, not just the self-employed.
This means that anyone who is due to submit a self-assessment income tax payment on July 31 now has until January 31, 2021 to make this payment, including those with rental and investment income.
The government stated this deferment was introduced to assist self-assessment taxpayers, including those who are self-employed, who are suffering hardship as a result of the coronavirus pandemic.
According to the guidance, this deferment is optional and anyone who is still able to pay their second self-assessment payment by the July deadline should still do so.
No penalties or interest for late payment will be charged in the deferral period.
Katharine Arthur, partner at Haysmacintyre, said: “HMRC have quietly adjusted the guidance but this is big news for individuals who don’t have the funds set aside for their July tax payment.
“The deferment will now assist all self-assessment taxpayers, not just the self-employed, who are suffering hardship as a result of the coronavirus including those with rental and investment income.”
The tax authority has also scaled up its time to pay offer to all firms and individuals who are in temporary financial distress as a result of coronavirus and have outstanding tax liabilities.
A time to pay arrangement is a way of spreading business tax payments over a longer period of time in a more affordable way.
An agreement is reached between the business and HMRC in an attempt to provide some breathing space to the business and allow cashflow to improve.
Time to pay has been pushed into the spotlight due to coronavirus which has created difficulties for many businesses.
Last week (March 20) the government announced a three-month deferral on VAT payments for all UK businesses.
This deferral will apply from March 20 until June 30, 2020.
This is an automatic offer with no applications required.
Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period.
VAT refunds and reclaims will be paid by the government as normal.
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