Deferred Your Tax or VAT in 2020? Here’s an Update for You!

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Self Assessment is never a particularly exciting – or enjoyable – time of the year, but in 2021, it’ll be different for many people.

This is particularly the case if you deferred your July 2020 payment on account due to the COVID-19 pandemic.

In July last year, the government announced an £11 billion boost for taxpayers in the form of an option to delay their Self Assessment payment for July.

If you grabbed that option, the only thing you needed to do was avoid paying the bill by 31st July. In doing so, the due date was automatically moved to 31st January 2021, without any form of penalty.

Now, that date is here. So, here’s a quick update on what you’ll need to do next.

Making sense of your Self Assessment statement

If you’re one of the many who deferred their July 2020 payment on account, you’ve probably recently received your statement from HMRC. If that’s the case, you’ve probably spotted the deferred payment as being due now.

You can make that payment now to avoid interest or penalties – providing you settle the full amount.

But what about that interest on your account? Don’t worry – if there is any interest displayed, it won’t have been applied to the July 2020 payment on account; it simply relates to any other payments you have outstanding.

If you submitted your 2019/20 return before you received the June 2020 statement, you’ll only see the revised date for the July 2020 payment on your new statement.

However, it’s important to remember that it will also show any additional payments which are due now.

How to pay your Self Assessment bill

The government thankfully makes it super easy to settle your Self Assessment bill.

To settle your July 2020 payment on account before the end of January, you can either:

  • pay it all in one go, via their online portal;
  • pay via Direct Debit (just remember you’ll need to reinstate the Direct Debit ASAP if you cancelled it to avoid the July 2020 payment last year);
  • pay in instalments (HMRC’s Time to Pay service is available quickly for anyone owing less than £30K); or
  • pay via PAYE (this will happen automatically if you pay your taxes on an employment or occupational pension via your employer – HMRC will simply adjust your tax code).

As always, we recommend speaking directly to HMRC if you have any questions about your Self Assessment statement and the ways to pay.

If you submitted your 2019/20 return before December

Some people will have submitted their 2019/20 tax return before receiving their December statement.

If that was you, you’ll probably see all payments due by the end of January. They’ll include the deferred payment from last July, any balancing charge for 2019/20, and your first 2020/21 payment on account.

Still confused? That’s ok – we doubt you’re alone. It’s also why we’re here, so don’t hesitate to get in touch with the friendly Trinity team if you have any Self Assessment questions.

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