How to handle HMRC time to pay rejections
Some taxpayers and advisers using the online service to defer tax due on 31 January 2021 are getting rejected. Rebecca Cave investigates what’s going wrong and how to work around any problems.
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I have a client who has been told that they are not eligible for the automatic online set up process and the only tax outstanding is the deferred second payment on account that was payable 31 July 2020 - is this the reason for them being ineligible?
Apparently yes. litrg.org.uk reported this in December: https://www.litrg.org.uk/tax-guides/coronavirus-guidance/coronavirus-sel...
With reference to the point about deferring NI, in what order does HMRC allocate payments to tax & NI?
ie if the taxpayer made POA in July but wishes to defer some or all of the payment due in January, will the NI be deemed paid or deferred?
I also want to pick up this: "Be careful when postponing class 2 NIC due for 2019/20, as if that is not paid by 31 January 2021, the tax year will not count as a completed year in the taxpayer’s NIC record".
As far as I'm aware, the liability including Class 2 NI is logged against the client account and then payments set against it, but on the basis of the comment above, that would suggest someone paying their 31st Jan liability 3 days late would lose the year for state pen purposes. Doesn't seem right?
EDIT: Appears incorrect https://www.mercia-group.co.uk/media/2645/class-2-nic-complexities-1.pdf
Six years to pay?