Musicians: Income Tax

(asked on 2nd December 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the case for permitting freelance musicians to defer (1) all, or (2) part, of their income tax payments during the COVID-19 pandemic.

Answered by
Lord Agnew of Oulton
This question was answered on 16th December 2020

Following the onset of the COVID-19 pandemic, on 20 and 26 March 2020 the Chancellor announced numerous easements to help businesses through this difficult time. This included the option for all Self-Assessment (SA) taxpayers, including the self-employed, to defer paying their second Payment on Account (POA) for the tax year 2019-20, ordinarily payable by 31 July 2020, for 6 months. All SA taxpayers, including self-employed freelance musicians, have until 31 January 2021 to make that payment without it incurring any late payment interest.

Furthermore, the Government understands that many SA taxpayers may have difficulty in paying their SA payments becoming due on 31 January 2021. To help them, HMRC have enhanced their automated online Time to Pay service, enabling taxpayers to clear their January 2021 SA liabilities in up to 12 monthly instalments.

Prior to October 2020, that service could only be used to pay tax liabilities of up to £10,000. However, HMRC increased the threshold to £30,000, to ensure it is now available to far more SA taxpayers than before. SA taxpayers eligible to use this service can set up a direct debit payment arrangement online without having to contact HMRC directly. HMRC estimate that up to 95% of SA taxpayers owing SA payments on 31 January 2021 will be able to use this online payment service.

Taxpayers with SA tax liabilities over £30,000 may still agree a Time to Pay arrangement with HMRC by contacting them directly. Further information is available on GOV.UK.

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