COVID-19: HMRC Time to Pay arrangements

This article was last updated on 3 March at 16:20.

The uncertainty surrounding COVID-19 has left many reviewing personal and business cashflow forecasts for the coming months.

HMRC has set up a dedicated COVID-19 helpline (0800 024 1222) to assist any business or self-employed individual providing advice, support and tax instalment arrangements.

Lengthy delays have been experienced calling the helpline, it takes approximately one hour to speak with a call handler. If you are looking to discuss a tax liability with HMRC please make sure you have the following information to hand, you will only require the separate references if you are to discuss each separate tax:

• CT reference number
• VAT reference number
• PAYE reference number
• PAYE accounts office reference number
• UTR number for self-employed individuals
• Bank account number and sort code for the tax payment/direct debit.

Instalment arrangements should be agreed in advance of the payment due date(s) in order to avoid late payment penalties, these are separate from interest charges. Ensure all returns are submitted to HMRC prior to the due date and at least 24 hours in advance of your call.

HMRC are very understanding of the circumstances and have agreed for some of our clients to defer tax payments for up to three months and instalment plans of up to 12 months. Their scope for agreeing instalment plans is constantly evolving.

Self-assessment and Time to Pay (TTP) arrangements

If you have not settled your tax liabilities, HMRC will charge interest until the liability is settled in full; the current annual rate of interest is 2.6%. If you do not pay your 2019/20 tax liability, or agree a payment plan with HMRC before 1 April 2021, the 5% late payment penalty (which normally applies to balancing payments due on 31 January but not paid by 28 February) will apply.

Payment plans will be accepted online if the tax due is: less than £30,000, your tax return filings are up to date, you do not have any other payment plans or debts with HMRC, and it is within 60 days of the payment deadline (2019/20 payment deadline, 31 January 2021). Payments are made by monthly direct debit. The applications must be made via your own Government Gateway account.

VAT deferral and TTP arrangements

If you deferred VAT payments during the period of 20 March 2020 and 30 June 2020 you can:

• Settle the liability on or before 31 March 2021
• Join the VAT deferral new payment scheme using the government online account (the same account used for your quarterly VAT return), to agree the payment term’s for settlement by 31 March 2022. This is an online service which will be available until 21 June 2021. Call HMRC on their support line if you require extra help.

Interest or penalties may apply if you do not:

• Pay the deferred VAT in full by 31 March 2021
• Opt into the new payment scheme by 21 June 2021
• Agree extra help to pay with HMRC by 30 June 2021

PAYE

PAYE returns should continue to be submitted as normal. We understand that the HMRC COVID-19 helpline may be able to provide a PAYE deferral although all liabilities relating to furlough have to be settled before any payment plan can be agreed. HMRC guidance and advice is ever evolving, but the key message is if you are unable to settle a tax liability on time, contact HMRC before the liability becomes due for payment. Failing to do so will result in penalties in addition to interest payments.

Should you require a payment plan you can contact the Payment Support Service (0300 200 3835) on Monday to Friday between 08:00 and 16:00.

If you have any queries ahead of your call with HMRC or require any assistance please do not hesitate to contact Danielle Ford, your usual haysmacintyre contact or email CV19@haysmacintyre.com.