Self Assessment Time to Pay Scheme
Chancellor Sunak’s Winter Economic Plan revisited the ‘Time to Pay’ scheme for Self Assessment tax bills, giving you the opportunity to spread the cost of your tax bill for the 2019/20 tax year (ending 5th April 2020).
Here’s what you need to know:
- The annual deadline for submitting your online Self Assessment and paying any tax owed is midnight on 31st January. This includes tax returns for 2019/20.
- Once you or your agent (us) have completed your Self Assessment tax return for the 2019/20 tax year, you can choose to use the online self-serve ‘Time to Pay’ service through GOV.UK. This enables you to create a monthly direct debit and pay any tax that is owed in monthly instalments over a 12-month period.
- You’ll need to meet strict 2019/20 tax year criteria to set up ‘Time to Pay’,
– your Self Assessment tax bill is between £32 and £30,000
– no other tax debts
-no outstanding tax returns
– no other HMRC payments set up
– it is no more than 60 days since the tax was due for payment.
- If you don’t meet the criteria, or need longer than 12 months to pay, there is still an option to set up individual ‘Time to Pay’ arrangements directly with HMRC. We can help you do this.
- If you set up a ‘Time to Pay’ monthly payment plan you will still have to pay interest on the tax paid late. This will be applied to the outstanding balance from 1st February 2021.
- If you have a ‘reasonable excuse’ you may be able to avoid paying the late-filing penalty, however this is at the discretion of HMRC officials. A reasonable excuse may be considered as death in the family, serious illness, catastrophic IT problems or issues with HMRC’s online services.
How much is the late-filing penalty?
If you miss the deadline you’ll receive an automatic £100 fine from HMRC. Usually this is simply added to your online account.
This fine applies whether you owe tax or not.
If you continue to fail to file by the end of April HMRC will then impose an additional £10 daily fine for the next 90 days, this increases the total penalty by £900 to £1,000.
Beyond this, further penalties are imposed after six and then 12 months – these penalties are based on the amount of tax you owe.
On top of the fines you’ll also be charged interest on unpaid tax.
What to do now:
If you have missed a deadline you really do need to push the matter to the very top of your to-do list. Fines and interest keep building up, so you should prioritise payment of outstanding tax as soon as you can. If you’re already registered for Self Assessment online, you simply need to gather together all of the financial information for the tax year including, annual accounts and/or P60, plus details of savings interest, investment profits, pension contributions, etc.
If you are not registered yet, you need to start this process right away – we can ensure this happens swiftly and ensure your self-assessment return is accurate and on time in future. If you’ve fines stacking up it is best to get the ball rolling as quickly as possible.
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About Oscar Fairchild:
Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an ACCA chartered and certified and AAT qualified accountancy, financial consultancy & bookkeeping practice with offices in The City of London, and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses and licensed London taxi drivers across London, Essex and Hertfordshire.
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