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HMRC has announced this week that for UK income tax self assessment, any second payments on account due 31 July 2020, are deferred automatically until 31 January 2021.  No penalties or interest for late payment will be charged.

Whilst this is an automatic offer (no application required), HMRC has stated that the deferment is still optional- and if you can pay by 31 July 2020, you should do so.  Certain taxpayers of course may prefer to make the payment this year.  For those who have set up an automatic payment (direct debit) already and should like to defer, they will need to proactively cancel any arrangements.

Please note that this is a change from earlier HMRC guidance which originally restricted the measure to the self-employed.  It has now been clarified that you do not need to be self-employed to be eligible - it applies to all self-assessment tax payers who have a second payment on account due by 31 July 2020.

This deferral will be welcome to both taxpayers and to any employers who may be liable for self assessment tax payments under arrangements such as tax equalisation, as another measure to support individuals and employers through COVID-19 disruption.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.