Income Tax: Self-Assessment second payment on account deferral

The deferral for income tax payable under Self-Assessment applies to those who are due to pay their second payment on account for 2019/2020 on 31 July 2020, which is deferred until 31 January 2021. You do not need to be self-employed to be eligible for the deferment.

This is an automatic offer and no application is required. Very few taxpayers pay their Self-Assessment liabilities by direct debit as the system requires a separate direct debit mandate to set up for each individual payment. Any taxpayer who qualifies for the deferral and has already set up a direct debit mandate for the payment on account due on 31 July 2020 should consider cancelling it.

Self-Assessment returns should still be filed by their due date and it may be advantageous to file the 2019/2020 return as soon as possible after 5 April 2020. This might facilitate planning for the tax payment due in January 2021 and perhaps crystallise any refund due, arising as a result of any loss relief claims which may be available.

No penalties or interest for late payment will be charged in the deferral period.

The deferment is optional. If you are still able to pay your second payment on account on 31 July 2020 you should do so. These are trying times for us all the government have introduced measures to help those within Self-Assessment by deferring payments on account for July 2020 until January 2021. However, this is a postponement of potential tax liabilities arising for the year ended 5 April 2020.

By deferring the payment, you will potentially have a larger tax payment to make in January 2021. Whilst we will aim to let you know the actual tax position as soon as we can we would encourage you to try and get your year-end books and records to us in a timely manner so that we can do this.