I’m worried about paying my tax

This is a worrying time for many business owners and tax payers. Even if you’ve been able to defer your taxes til next year, it’s still a worry, and what do you do about taxes you owe now?


Let’s go through the different taxes, and what the situation is now:

You could have the following taxes due, and we’ll go through each in turn to explain when you need to pay, and how you can delay:

1. VAT

  • VAT payments which were due between 20 March 2020 and 30 June 2020 were automatically deferred to 31 March 2021
  • You now have a further 11 months from March 2021 to pay this VAT
  • This means you have until March 2022 to pay VAT that was due between 20 March and 30 June 2020
  • You must arrange time to pay with HMRC to arrange smaller payments from¬† March 2021 follow this link
  • To find out your deferred VAT, go to Accounting and VAT returns in Xero
  • Or ask your accountant

2. Self Assessment July 2020 Payment on Account

  • This was automatically deferred to 31 January 2021
  • However, you can now arrange smaller payments up to 31 January 2022
  • You can also arrange time to pay any of your self-assessment tax bill
  • Go to your online HMRC account to set up a payment plan
  • This option may not be available if you owe more than ¬£30,000 in tax, or if you have other HMRC payment plans already

3. PAYE

  • This is normally due monthly or quarterly
  • This was not automatically deferred like the VAT or Self Assessment
  • If you can’t pay, you can also make time to pay arrangements with HMRC

4. Corporation Tax

  • This is normally due 9 months after your year end
  • This was not automatically deferred like the VAT or Self Assessment
  • Time to pay arrangements need to be made by calling HMRC
  • It is worth noting that although Companies House has delayed the filing deadline to 12 months after the year end, this does not apply to the tax payment
  • Go ahead and make time to pay arrangements with HMRC

Time to Pay Arrangements: what you need to know

When you speak to HMRC you will need the following information:

  • The tax reference (eg VAT number, PAYE reference)
  • The amount due
  • What period the amount relates to
  • How much you can pay, and over how many months
  • A note of any other taxes already under a time to pay arrangement
  • Any other taxes you want to add to a time to pay arrangement