HMRC had already allowed people to defer payment of their 31st July 2020 second payment on account until 31st January 2021.
Now, that is being extended through a new time to pay arrangement that will enable people to set up their own online payment plan to cover any or all of the below liabilities:
1) The deferred 31st July 2020 payment on account
2) The balancing payment due 31st January 2021
3) The first payment on account for 2021, due 31st January 2021
Online payment plans of up to £30,000 are allowed, with repayment up to 12 months.
There are a few conditions that have to be met to use the scheme:
1) The 2019/20 and any other outstanding tax returns have to have been submitted
2) There is not already a payment plan in place
3) There are no other outstanding tax debts
Beware of interest charges
While the deferment of the 31st July 2020 payment on account to 31st January 2021 was interest-free, interest will be charged on any payment plans from 1st February 2021.
How to arrange a HMRC payment plan
To arrange a payment plan, go to this address:
https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments
and select ‘set up a payment plan online’ to begin.
