This is a worrying time for many business owners and tax payers. Even if you’ve been able to defer your taxes til next year, it’s still a worry, and what do you do about taxes you owe now?
Let’s go through the different taxes, and what the situation is now:
You could have the following taxes due, and we’ll go through each in turn to explain when you need to pay, and how you can delay:
1. VAT
- VAT payments which were due between 20 March 2020 and 30 June 2020 were automatically deferred to 31 March 2021
- You now have a further 11 months from March 2021 to pay this VAT
- This means you have until March 2022 to pay VAT that was due between 20 March and 30 June 2020
- You must arrange time to pay with HMRC to arrange smaller payments from March 2021 follow this link
- To find out your deferred VAT, go to Accounting and VAT returns in Xero
- Or ask your accountant
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Join the new VAT Deferral Scheme from 23 February 2021
- You can now pay your deferred VAT over 11 months to 31 January 2022
- The sooner you sign up, the longer you have to pay
- More info here from HMRC, including the live portal where you can sign up
2. Self Assessment July 2020 Payment on Account
- This was automatically deferred to 31 January 2021
- However, you can now arrange smaller payments up to 31 January 2022
- You can also arrange time to pay any of your self-assessment tax bill
- Go to your online HMRC account to set up a payment plan
- This option may not be available if you owe more than £30,000 in tax, or if you have other HMRC payment plans already
3. PAYE
- This is normally due monthly or quarterly
- This was not automatically deferred like the VAT or Self Assessment
- If you can’t pay, you can also make time to pay arrangements with HMRC
4. Corporation Tax
- This is normally due 9 months after your year end
- This was not automatically deferred like the VAT or Self Assessment
- Time to pay arrangements need to be made by calling HMRC
- It is worth noting that although Companies House has delayed the filing deadline to 12 months after the year end, this does not apply to the tax payment
- Go ahead and make time to pay arrangements with HMRC
Time to Pay Arrangements: what you need to know
When you speak to HMRC you will need the following information:
- The tax reference (eg VAT number, PAYE reference)
- The amount due
- What period the amount relates to
- How much you can pay, and over how many months
- A note of any other taxes already under a time to pay arrangement
- Any other taxes you want to add to a time to pay arrangement
