In the event that a business or individual is unable to pay their tax liabilities (Corporation Tax, PAYE and NI, VAT, Income Tax etc) by the due date, it may be possible to enter into what’s called a Time to Pay or TTP arrangement with HMRC. You will need to make your case to HMRC as to why you should be allowed TTP, and that these tax liabilities could be met in the future.
If successful, this would result in the deferment of liabilities, providing some cashflow relief in these periods of disruption. NB It’s important to understand that under a TTP agreement the business will have to pay both the deferred and current tax liabilities when the TTP comes to an end. Click here for further HMRC guidance.
There are two automatic deferrals that you don’t need to apply for:
This quarter’s VAT payment can be deferred until 31 March 2021
The July income tax self-assessment payment on account can be deferred until 31 January 2021
In both cases, you will need to cancel your direct debit arrangement otherwise the money will be collected as normal.