Delaying Your Self-Assessment Tax Liability

Ask anyone with a birthday in January, they’ll tell you that no one ever comes to their birthday party. It’s cold, it’s dark and everyone is skint!

If that was not enough, imagine you had a self-assessment tax liability due by 31 January every year. This would usually happen after you file your tax return and realise how much tax money you owe HMRC.

Even if you have a tax liability bill to pay, it doesn’t have to be this grim. We might not be able to do much about the weather, but tax liabilities can be prolonged so they aren’t due so soon after Christmas.

How to delay paying liabilities

Provided that your tax return is submitted online to HMRC by 30 December 2021, and you make the appropriate claim, your liability can be deducted through your tax code over the course of the next tax year rather than paying it as a lump sum in January. If you want to take this option, make sure to select (tick) it when doing your tax return.

What are the advantages of spreading the cost?:

• No late payment interest (0% interest p.a)
• No payments on account
• No penalties

Meeting the criteria

Not everyone is eligible to make this claim, but you certainly cannot if you do not submit your tax return by 30 December 2021. You will not have this option if you aim towards 31 January 2022 as the deadline day for your tax return submission.

There is other complicated criteria, but the main requirements are:

• The tax due to HMRC is less than £3,000
• You have a source of PAYE income (employment or private pension), and you already pay tax on it.
• You submit your tax return online by 30 December 2021

Tax planning can not often be done after the end of the tax year. Therefore, always plan ahead and think about your tax implications in advance, before you submit your tax returns.

Not sure if you are eligible?

If you are self-employed and don’t know where to start, give us a shout. We deal with tax questions like these with our clients all the time. Email us at Enable JavaScript to view protected content. or phone us on 0131 364 4191.