On 5 October, HMRC announced further details surrounding their new ‘Enhanced Payment Plan’ instalment scheme.

The scheme was introduced to allow the 31 January 2021 Self-Assessment tax payments to be spread the cost into monthly payments. This is the tax due on completion of your personal tax return. It doesn’t cover any other taxes like Corporation Tax, VAT or PAYE for employers.

You can read more details here on the HMRC website.

Who is eligible?

The requirements are a little tighter than the Chancellor’s first announcement initially suggested.

The Enhanced Payment Plan is only eligible for those with a tax bill between £32 to £30,000. There are however additional requirements that effectively need to demonstrate that other than tight cashflow due to Coronavirus, you have not had any other issues with HMRC recently (certainly on your personal account).

In order to be eligible, the new guidance states you:

  • Must have submitted all required tax returns due – no missing filings, so get any missed old ones filed before 31 January 2021
  • Must have no other debts owed to HMRC – we would assume this means personal liabilities, although it is not clear if a sole trade or partnership that has utilised the VAT deferral scheme would fall foul of this rule. More guidance is needed here.
  • You have no other “time to pay” arrangements set up personally
  • You have to apply for payment by instalments within 60 days of the day the tax was due – as personal tax is due on the 31 January 2021 this suggest the deadline for applying to pay personal tax by instalments will be the 1 April 2021

If your Self-Assessment debts are over £30,000, or you need longer than 12 months to pay your debt in full, you may still be able to set up a Time to Pay arrangement by calling the Self-Assessment Payment Helpline on 0300 200 3822.

Please be aware that interest will still be charged on the outstanding balance from 1st February 2021.

How to apply

The Enhanced Payment Plan is not automatic, so if you need to use it, you will need to apply online, which you can do now using your HMRC Government Gateway account. Details of how to apply are here.

Unfortunately, HMRC do not allow Agents to set up payment plans on our clients’ behalf, and therefore we will not be able to do this for you.

But as always, please contact us on 01473 853 856 or enquiries@a4g-llp.co.uk if you need any support setting this up or working out if you are eligible.

Whilst schemes like this are a great help to businesses navigating through this time, the impact of Coronavirus is being felt far greater. Our Breakthrough Recovery Programme can help you rebuild your business, increase profits, streamline your processes, grow and most importantly ensure you feel much more confident in the future of your business.

Head over to our website to read how this programme can help your business recover and prosper and email us at discovery@a4g-llp.co.uk for your personalised quote.

Or come along to one of our free events next month to hear what it’s all about and all the other ways we can help your business recover successfully through this pandemic and beyond.

Do you own a commercial vehicle? Or are thinking of acquiring one? Do you know how to comply with all the compliance involved? Or how you can save on your insurance premiums?

Do you need some advice on how you can make more money, increase profits and recover your business in an efficient way?

Come along to our latest webinar in partnership with other experienced experts, Less Bangers, More Cash on 5 November at 4:30 pm. Secure your spot at the button below.

We will be recording this webinar and sending it to those registered after the webinar, so even if you can’t make it on the day, register your space to have access to the recording.

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Contact me today!

Josh Curties

BA (Hons) ACA

Partner & Principal Adviser

01474 853856

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