Most taxpayers who are within self-assessment and who have an annual tax liability in excess of £1,000 will expect to have to pay tax at the end of January and July each year, and HMRC are currently in the process of sending out statements for the payment due at the end of July.
This year, because of Covid-19 and the impact it has had on cash flow for many taxpayers, it is possible to defer payment of the tax due at the end of July until 31 January 2021. Please note this is not a cancellation of the tax due, simply a deferral by six months of the date on which it has to be paid.
If the payment is deferred, no interest or penalties for late payment will be charged as long as payment is made in full on or before 31 January 2021.
If you would like to take advantage of the opportunity to defer the payment, you do not need to do anything, unless you normally pay your self-assessment tax by direct debit. If you have a direct debit, you will need to cancel it before the end of July, as HMRC have said they will automatically collect all direct debit payments as normal when they are left in place.
If you do have a direct debit mandate in place, and cancel it now, but wish to continue to pay by direct debit in future, you must remember to reinstate the mandate before the end of January.
If you would prefer to pay the tax due in July as normal, you should go ahead with this as normal.