COVID-19: Deferring Income Tax payments - Updated: 01 October 2020

  • Coronavirus: Deferring Income Tax payments

    As part of the government support package to deal with the COVID-19 pandemic, Income Tax payments on account due in July 2020 under the Self Assessment system may be deferred to January 2021.


    At a glance


    Payments on account of Income Tax due under Self Assessment are due on 31 January, during the tax year, and 31 July following the end of the tax year.


    The second payment on account for the 2019/20 tax year is due by 31 July 2020.


    HMRC have announced that:


    • The July 2020 payment may be deferred until 31 January 2021.
    • This is an automatic offer with no applications required.
    • No penalties or interest for late payment will be charged in the deferral period.


    Originally badged as applying to the self-employed only, the government has since amended their guidance and it now includes all taxpayers due to make Self Assessment payments on 31 July 2020 including landlords.


    Anyone who wished to make their payment by 31 July 2020 could do so.


    On 24 September 2020 as part of the Winter Economy plan it was announced that taxpayers with up to £30,000 of Self-Assessment liabilities due on 31 January 2021, whether deferred from July 2020 or otherwise due by 31 January under self-assessment, could make payment in 12 monthly instalments under the time to pay arrangements. This means the final payment would not be due until January 2022.


    •  No specific announcement has been made about whether interest will be charged however as this will be under the existing time to pay arrangements it is likely that it will be.
    • No eligibility criteria have yet been released and it may be that taxpayers will need to provide evidence that they are unable to pay on time.


    Claims to reduce payments on account


    • We note also that businesses who know that their 2019/20 profits are going to be less than the previous year can still make claims to reduce their payments on account.
    • Going forward it is likely that many businesses will also see a drop in profitability in the 2020/21 tax year. The first income tax payment on account for 2020/21 will be due on 31 January 2021, businesses should monitor their position as we reach the end of 2021 and make an appropriate claim if necessary.




    COVID-19: Government support tracker

    This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.


    External links


    Understand your Self Assessment tax bill


    If you cannot pay your tax bill on time


    Coronavirus (COVID-19) Business support





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