Impact assessment

Income Tax Self Assessment deferral

Published 13 October 2022

Project objectives

Some businesses experienced increased costs or disruptions to their cashflow because of coronavirus. The set of measures put in place by the government provided support to businesses during this period by either reducing their costs or bridging cashflow problems arising from the outbreak, and protecting people’s jobs.

To support the government’s aim of easing burdens on businesses, HMRC allowed some Self Assessment taxpayers to defer payment of tax. Self Assessment taxpayers who had an existing payment on account due 31 July 2020 could choose to defer all or part of that payment until 31 January 2021, waiving any late payment penalties which would usually fall due and stop any late payment interest on deferred tax accruing.

This measure was extended following the announcement of the Chancellor’s Winter Economy Plan in September 2020, giving customers the option of paying their second payment on account deferral over 12 monthly instalments by setting up a time to pay agreement.

We also enhanced Time to Pay for Self Assessment taxpayers with up to £30,000 of Self Assessment liabilities due, who could secure a Time to Pay arrangement of up to 12 months if they applied within 60 days of their payment deadline.

In early January 2022, in recognition of the pressure faced by Self Assessment taxpayers and their agents, HMRC waived late filing and late payment penalties for one month – giving them extra time, if they needed it, to complete their 2020 to 2021 tax return and pay any tax due.

The deadline to file and pay remained 31 January 2022, but the penalty waivers meant that:

• anyone who could not file their return by the 31 January deadline would not receive a late filing penalty provided they filed online by 28 February
• anyone who could not pay their Self Assessment tax by the 31 January deadline would not receive a late payment penalty if they either paid their tax in full, or set up a Time to Pay arrangement, by 1 April

This screening template is in relation to the operational delivery of the scheme.

Customer groups affected

Customers who deferred their second payment on account and customers who were unable to meet their obligations in time for the 31 January 2021 deadline.

What customers needed to do

What customers needed to do as a result of the change

The second Self Assessment payment on account was due on 31 July 2020. Customers did not need to apply for the Income Tax Self Assessment deferral, but could instead pay it over 12 monthly instalments by setting up a time to pay arrangement by the Self Assessment filing deadline of 31 January 2021.

They only needed to contact HMRC if they had existing payment plans in place, such as a time to pay agreement, or had already paid their second payment on account and required a refund.

How customers accessed this service

Customers could access this service through their personal tax accounts, business tax accounts, or by calling HMRC.

Self Assessment taxpayers with up to £30,000 of Self Assessment liabilities due could use HMRC’s self-service Time to Pay facility to secure a Time to Pay arrangement of up to 12 months if they applied within 60 days of the payment deadline.

Any Self Assessment taxpayer not able to pay their tax bill on time, including those who were unable to use the online service as they didn’t meet the criteria, could access Time to Pay by calling the helpline.

When customers needed to do this

Customers who were unable to pay their second payment on account by the 31 July 2020 needed to set up a time to pay arrangement by the Self Assessment filing deadline of 31 January 2021.

Customers who were unable to file their 2020-21 tax return and pay any tax due by the 31 January 2022 deadline needed to:

• file online by 28 February to avoid a late filing penalty
• either pay their tax in full, or set up a Time to Pay arrangement, by 1 April 2021 to avoid a late payment penalty

Extra support services will be available for customers who require additional support.

Assessing the impact

Before the scheme started, we assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act:

• racial groups
• disabled and not disabled
• sex
• gender reassignment
• sexual orientation
• age
• religion or belief
• pregnancy and maternity
• marriage and civil partnership
• people with dependents and those without
• political opinion (for Northern Ireland only)
• people who use different languages (Including Welsh Language and British Sign Language)

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups (listed above).

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group.

We have not identified any opportunities within the scope of this project.

A full equality impact assessment is not recommended.