The government has announced that they wanted to offer more support to businesses that may be experiencing problems caused by the COVID19 pandemic. Usually, businesses that submit their annual self-assessment tax return would need to pay any tax due to HMRC by 31 January 2021.
However, many businesses are opting to spread the cost of their tax bill by making monthly payments. The payment plan facility is usually only available to businesses that have tax liabilities up to £10,000.
The new announcement made on 1 October 2020 states that the threshold has now been increased to £30,000. This means that if your tax liabilities are £30,000 or less, you can set up a payment plan, and this should ease the financial burden on your business at the start of next year.
To take advantage of this new payment plan, you do not need to call the HMRC. You can apply online and set up monthly payments based on your individual circumstances. You can decide how much you want to pay straight away and then set your monthly payment.
However, it is essential to note that if you use the self-serve Time to Pay plan, you will need to pay interest in the tax owed. The interest will be applied to any outstanding balance from 1 February 2021.
This is the online portal for the self-serve Time to Pay plan – set up a payment plan online.
We are urging all our clients to send in their paperwork for their self-assessment tax return as soon as possible. Once the submission is made, this will help you assess whether you need to set up a payment plan or not.
We know the year ahead is going to be very challenging for many businesses, and we are here to help. As well as any tax liabilities businesses may also have deferred VAT payments to make. Hence, it is important to have a budget plan in place to ensure that all payments can be met whilst keeping good cash flow within your business.
If you would like any advice on your self-assessment tax return or support with developing a financial plan for next year, please do get in touch. We are here to help you.
You can call 01623 490 120 or email