Your July tax statement may look a bit confusing when you receive it.
One of the Coronavirus measures introduced by Mr Sunak was to allow people, if they needed to, to defer their July 2020 self-assessment tax payments. In other words he announced that whatever tax you would normally have been required to pay in July 2020, could be paid January 2021 instead.
We will already have advised you what your July 2020 payment is when we sent you last year’s tax return.
However, on the current tax statements they have issued this month HMRC are showing all July 2020 payments as being due 31/01/2021. That is confusing many clients who are saying to us they have been told what to pay next January but not what to pay this July.
The answer is of course that the amount being shown as due next January IS the July 2020 payment, just that HMRC have shown it as due next January due to the Coronavirus relief.
Depending on your circumstances, you may think it wisest to pay the July payment now if cash flow allows.
If you do decide to defer payment of your July 2020 tax until January 2021 (which you are perfectly entitled to do), then do remember that on 31/01/2021 you will have to pay the July 2020 payment on account PLUS whatever tax is due on the 2020 return.
If in any doubt about your personal situation, please do get in touch with us.