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£4bn deferred under time to pay

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A record £4bn in tax was deferred in the run-up to the 31 January 2021 self-assessment deadline, according to data obtained by accountancy firm Price Bailey. The figures show that the value of time to pay arrangements stood at some £4.1bn at 30 September 2020 (and highly likely to have increased further before the end of January), double the amount at the end of the same period in 2019.

Price Bailey notes that for many taxpayers, the 31 January deadline will bring together three components this year: (1) the second payment on account for 2019/20 (deferred from July 2020), (2) any balancing payment for 2019/20, and (3) the first payment on account for 2020/21.

Jay Sanghrajka, tax partner at Price Bailey, commented: ‘If taxpayers have filed tax returns late or previously incurred penalties, they will not be eligible for Time to Pay. This is very harsh considering that tax payments might have been missed due to cashflow problems caused by lockdowns. HMRC needs to show flexibility on this. A monthly payment plan covering up to 12 months is too short a time frame for a lot of smaller businesses which are going through the pain that the pandemic has caused. The Government should consider extending this time period to protect jobs and livelihoods.

Issue: 1518
Categories: News