In response to the outbreak of COVID-19, we acknowledge that many customers will be coming under increasing financial pressure to pay their taxes in full and on time.
This might mean that to maintain a business’s long-term viability, arrangements might need to be made in respect of a business’s ability to pay its tax. We've been asked to clarify what support is available to customers.
Types of relief available
New debt due to COVID-19
- An Instalment arrangement.
- An Instalment arrangement - deferred payment start date.
- Partial write-off due to serious hardship and payment of the remaining tax by instalment or a lump sum.
- Partial payment and write-off the balance under maximising recovery of outstanding tax.
- Write-off due to serious hardship.
- Remission of penalties and interest.
Pre-existing debt before COVID-19
Customers who may already be in an arrangement but believe they may not be able to continue with the current terms due to being significantly affected by COVID-19 may ask to renegotiate the instalment arrangement.
Any of the above options may be appropriate and each case will be considered on its own facts. We encourage customers to contact us as soon as they believe they will have difficulty in meeting their current arrangement.
Customers who do not have their debt under an arrangement should contact us as soon as possible to discuss what options may best suit their circumstances.
Sarah pays her provisional tax late
Sarah is a provisional taxpayer for 31 March 2020. The 3 due dates for payment are:
- 28 August 2019
- 15 January 2020
- 7 May 2020.
Sarah is on the standard option. She has not paid her provisional tax in full and by the due dates.
On 7 July 2020 Sarah files the return for the 31 March 2020 tax year. We have applied penalties and interest on all the provisional tax due dates. Sarah's business has been affected by COVID-19, so we have applied an indicator to her account.
We will only suppress penalties and interest on the bills due after 14 February 2020. The only bill due after this date is the third provisional tax instalment (P3) due 7 May 2020. We can remit only penalties and interest charged to the P3 assessment and only from 7 May 2020. Any penalties and interest we charged before this date remain. Penalty and interest remission for P1 and P2 is only possible under standard remission rules.
If Sarah has residual income tax (RIT) to pay over the provisional tax, she may still have UOMI up until the due date for her final provisional tax for that amount. Any UOMI calculated after the final RIT due date will be eligible for remission, but not the amount calculated up to the final tax due date.