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Advice for landlords with cash flow difficulties

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Buy-to-let landlords struggling to make ends meet as a result of the coronavirus pandemic have been given the option of deferring their self-assessment tax payments on account, which are due by 31 July.

HM Revenue and Customs (HMRC) is giving people until 31 January 2021 to make their July payments. But anyone needing to take up this deferment must contact HMRC as soon as possible.

landlords-defer-tax-payment

Covid-19 has left landlords across the country struggling financially as tenants are unable to meet rental payments. The extension of the ban on evictions, until the end of August, has also meant landlords may be unable to tackle problems with arrears.

However, it is thought that many landlords do not know about the change in tax payment arrangements from HMRC. The change means that no penalties or interest for late payments will be charged in the deferral period. However, anyone in a position to make the July payment is urged to do so – to avoid being faced with a larger bill in January 2021.

If you feel you will still struggle to meet your payments in the new year, you should contact HMRC to discuss a payment arrangement well before the deadline.

Fiona Fernie, tax dispute resolution partner at accountants Blick Rothenberg, explained: “HMRC have said that July tax payments for anyone who pays by self-assessment can be delayed until January, but if they have the money, I would urge them to pay now so that they are not faced with a double bill.”

“Understandably, most people are primarily thinking about how to pay the mortgage and put food on the table, but it is important to remember that the postponement of the 31 July 2020 payment on account merely delays the liability; it does not wipe it out.”

Read more about this story on the Landlord Today website.

Neil Jennings

Neil is the Operations Director at Assetgrove Lettings, London's Leading Rent Guarantee Company, providing Landlords with no voids, property maintenance, fee-free property management and stress-free service.

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