Managed Payment Plans

HMRC has announced that they will launch a new method of paying tax liabilities, known as Managed Payment Plans, in April 2011.

The plan could be entered into by any individual taxpayer making payments under Self Assessment (whether final payments or payments on account) and by companies, under corporation tax self assessment. Group companies and those already subject to quarterly instalment arrangements will be unable to apply.

In order to be able to take advantage of the scheme, which allows the tax to be paid in monthly instalments, taxpayers will have to meet certain conditions:

• The taxpayer has made their self assessment for the year.
• All previous tax must have been paid or time to pay arrangements must already be in place.
• Payments must be made by direct debit.

Payments need to be made in equal monthly instalments on 15th of each month spread symmetrically either side of the payment date. In order to take advantage of a full twelve months to pay, taxpayers will need to make their self assessment and propose their plans by the following dates:

• 31 October for SA taxpayers who are required to make payments on account on 31 January and 31 July;
• 31 July for SA taxpayers who only have a final 31 January payment to make;
• six months before the normal due date for payment for CTSA.

The deadlines for the submission of returns are tight. If you are interested in taking advantage of the payment option please do get in touch so we can look into the matter for you.

Internet link: HMRC news