July Deferral

Deferral of 31 July 2020 Payment on Account

Under the Government’s time to pay measures introduced in the wake of the Coronavirus pandemic, HMRC advised that anyone struggling to pay the July 2020 payment on account could defer payment until 31 January 2021.

HMRC have confirmed that their IT system has been updated so that deferred payments don’t incur any late payment interest for payments made between 1 August 2020 and 31 January 2021.  For this reason, you may recently have received your self-assessment statement showing that the 31 July 2020 payment on account is due on 31 January 2021.

The deferment has not been automatically applied for all taxpayers, however deferment is still an option.  So, if your statement is showing the due date as 31 July, you are still able to defer this until 31 January 2021 without the need to contact HMRC.

You can still make payment by 31 July 2020 as normal if you prefer.  One drawback of deferring the July 2020 payment until 31 January 2021, is that on this date you will also be required to pay any balancing of tax outstanding for the year to 5 April 2020 along with the first payment on account for 2020/21.  This could therefore result in a cash flow issue at the end of January 2021.  Please bear this in mind if choosing to defer the 31 July 2020 second payment on account.