From 1 October, HMRC has increased the threshold for paying tax due under self assessment to £30,000. This is to help ease any financial burden for taxpayers because of the pandemic. Many taxpayers will be looking at significant tax payments on 31 January 2021, particularly if they have deferred their 31 July 2020 payment on account.
Taxpayers can use an online payment plan service to set up instalments to pay their liabilities over a 12 month period. This payment due can be made up of the deferred second payment on account and outstanding tax for 2019/20, plus the first payment on account for 2020/21.
Taxpayers with liabilities in excess of £30,000, and those who need longer than 12 months to settle should contact HMRC in the normal way.
One of the conditions for setting up this payment plan, is that the taxpayer must have no outstanding tax returns, so it will be important that those individuals wanting to use this facility file their return in a timely manner and in advance of 31 January 2021 deadline.