Self Assessment: A 31st July like no other

With 31st July fast approaching, most business owners would ordinarily be getting ready to pay their second payment on account under Self Assessment.

But the 31 July 2020 will be different for many.

This is because, as part of a range of COVID-19 financial measures introduced by the Chancellor, Rushi Sunak, individuals who have a personal tax payment on account due by 31 July 2020 can choose to defer it until 31 January 2021.

If you do decide to take up this offer of deferment, there is no need to notify HMRC - they are kinda expecting it!

There is no late payment interest due to be paid on the deferment amount so all in all it is a fairly generous offer.

You may notice from your statement from HMRC that the second payment on account is showing as due by 31 January 2021 already - this is not aimed to confuse, but rather to stop the HMRC computers from automatically adding interest if the payment date was left at 31 July and the deferment option taken.

The trick will be to set aside the cash now, otherwise you may be in for some added 'post-Xmas blues' when you find that you have an 'added' personal tax liability due on 31 January 2021...

Don't forget that in addition to settling this deferred July payment, you will also be due to pay any balancing amount for the 2019/20 period plus your first payment on account for the 2020/21 period - that's three potential payments falling due!

That could be painful.

If you are feeling sporting (or simply don't trust yourself to find the funds in six months' time!) , you can go ahead and make your July payment now as normal.

I have little doubt that the Government would very much welcome the funds right now!