7 December 2020    |    corona virus, Taxation

Self-assessment tax due January 2021

If you took advantage of HMRC’s schemes and deferred your self- assessment tax because of coronavirus then what options are there to pay?  And when is best to do it?

2019/20 tax due July 2020

HMRC allowed you to postpone the second self-assessment payment on account for 2019/20 if you were detrimentally affected by coronavirus.
Strictly, the tax was due by 31 July 2020 as normal.

The arrangement is you can pay it on or before 31 January 2021.  But, after that HMRC will charge interest.

Tax normally due 31 January 2021

You can pay your tax by instalments if you’re unable to pay in full by 31 January 2021. If you file your 2019 to 2020 Self Assessment return early HMRC will know what payments you owe before the 31 January 2021 payment due date.

You’ll then be able to set up a Time to Pay instalment arrangement with HMRC covering all income tax due in 31 January 2021.

If you owe up to £30,000 you can do this online without having to contact HMRC directly.  You will need a Gateway account and then you can make an arrangement which will be automatically approved.  This will stop you getting demands and ‘chase’ letters.

When you have filed your return you’ll need to wait at least 48 hours before you can set up your Time to Pay arrangement online.

Late payment penalties are charged when tax remains unpaid 30 days, 6 months and 12 months after its due date for payment. You can avoid them if you enter into a Time to Pay arrangement before they become due and you pay all the tax owing under that arrangement on time.

Self-assessment due July 2021

This tax will be due on the normal date as usual, so please ensure your budget for this.

Need more time to pay your taxes?

If you’re still struggling with finances because of coronavirus, or for any other reason, when you get to the VAT or income tax deadline, get in touch with HMRC’s Time To Pay service. It’s always best to do this as soon as you realise you won’t be able to meet a payment deadline. There wasn’t a deferral for corporation tax (CT) but TTP arrangements are allowed for CT too.


You can leave payment until HMRC’s deadlines – 31 January 2021 for income tax and 31 March 2021 for VAT. There will be no interest or penalties if you pay your deferred tax by then.

You can get automatic agreement from HMRC to pay your January 2021 tax over 11 months. This avoid penalties and stops HMRC sending you repeated demands.

The July 2021 payment is due in the normal date.

Alternatively, if you want to avoid a big tax hit all at once consider an HMRC budget plan. If you think you won’t be able to pay on time contact HMRC early and ask for time to pay.

It is easiest for you to arrange this directly with HMRC, but if you have any difficulties then please contact our tax team.

Get more information on our free tax app.
Deferred your tax?


The information provided is for general information purposes only.

Legislation and details may have changed since this was written.  The text may not include all matters that are relevant to your individual situation.

You should not make decisions, or refrain from making decisions, without taking further professional advice about your specific circumstances.

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