Payments on Account deferral
You may be aware that the 31 July 2020 payments on account (POA) have been deferred until 31 January 2021 due to the coronavirus pandemic, this is an attempt to ease financial pressures that individuals are currently facing.
HM Revenue & Customs (HMRC) have now started to issue the official payslips and you will notice that due date is shown as 31 January 2021 and not the usual 31 July 2020.
We are wanting to make clients aware that if you chose to defer your 31 July POA until 31 January 2021, then you would be faced with a “double bill” in January. This is because you will not only need to pay HMRC the deferred 31 July POA but also any balancing payment for the 2019/20 tax year and the first POA towards 2020/21 (if applicable).
HMRC have not made this very clear when sending payslips to individuals and we would advise that if you are in a position to do so you should proceed with the 31 July POA as planned to manage the cashflow impact in January.
The link below provides some additional information that you may find helpful:-
If you have any queries or concerns please do not hesitate to contact a member of our tax team or email Tax.Shared@simpson-wood.co.uk