Deferral of Self Assessment (Income Tax) Payments
If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Additionally HM Revenue & Customs (“HMRC”) announced on 26 March 2020 that if you are required to make a payment on account on the 31 July 2020, this may be deferred until 31 January 2021. Previously, this was only available to the self-employed but this has now been extended to all taxpayers within self-assessment. They have also confirmed that no interest or penalty charges will apply. HMRC have advised that where possible, taxpayers should still make the payment, subject to cash flow.
Deferral of the next VAT quarter payment
The chancellor confirmed that VAT payments for the next 3 months will be deferred until the end of the financial year. Therefore, businesses will not need to pay any VAT between now and June 2020 and the VAT due for this period will not need to be paid until the end of the 20/21 financial year.
In either instance, where tax is collected via direct debit, then organisations should should cancel their direct debit mandate with their bank if they are unable to pay and should do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
HMRC have now issued guidance where you choose to defer paying VAT. It should be noted that the concession does not include to payments due under the VAT MOSS Scheme: