Is deferring July tax bill out of choice unethical?
Discussion
Hello chaps,
As I'm sure you're aware, July's tax bill for self assessment can be deferred with no penalty until January.
The money (fair sum) is in our offset mortgage account, as such would actually be doing something useful for us for the next 6 months.
I would probably pay regardless as I don't like outstanding debt and I'd just like to draw a line underneath it. However I suspect there may be many out there who would take advantage of this opportunity (even if they don't need to) and keep their money until January.
So what do you chaps reckon, unethical to defer if you can pay?
As I'm sure you're aware, July's tax bill for self assessment can be deferred with no penalty until January.
HMRC said:
You have the option to defer your second payment on account if you’re:
- registered in the UK for Self Assessment and
- finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you’re able to do so.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.
My wife (a genuinely good person) said if we've got the money, it would be unethical to defer until January given the criteria ("finding it difficult to make payment due to coronavirus").- registered in the UK for Self Assessment and
- finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you’re able to do so.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.
The money (fair sum) is in our offset mortgage account, as such would actually be doing something useful for us for the next 6 months.
I would probably pay regardless as I don't like outstanding debt and I'd just like to draw a line underneath it. However I suspect there may be many out there who would take advantage of this opportunity (even if they don't need to) and keep their money until January.
So what do you chaps reckon, unethical to defer if you can pay?
g3org3y said:
Hello chaps,
As I'm sure you're aware, July's tax bill for self assessment can be deferred with no penalty until January.
The money (fair sum) is in our offset mortgage account, as such would actually be doing something useful for us for the next 6 months.
I would probably pay regardless as I don't like outstanding debt and I'd just like to draw a line underneath it. However I suspect there may be many out there who would take advantage of this opportunity (even if they don't need to) and keep their money until January.
So what do you chaps reckon, unethical to defer if you can pay?
You’ve stated yourself that you have the funds available and would have no trouble paying, so I’m unsure why you’re even asking.As I'm sure you're aware, July's tax bill for self assessment can be deferred with no penalty until January.
HMRC said:
You have the option to defer your second payment on account if you’re:
- registered in the UK for Self Assessment and
- finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you’re able to do so.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.
My wife (a genuinely good person) said if we've got the money, it would be unethical to defer until January given the criteria ("finding it difficult to make payment due to coronavirus").- registered in the UK for Self Assessment and
- finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you’re able to do so.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021.
The money (fair sum) is in our offset mortgage account, as such would actually be doing something useful for us for the next 6 months.
I would probably pay regardless as I don't like outstanding debt and I'd just like to draw a line underneath it. However I suspect there may be many out there who would take advantage of this opportunity (even if they don't need to) and keep their money until January.
So what do you chaps reckon, unethical to defer if you can pay?
ETA - it’s similar to those who have taken a mortgage repayment holiday but haven’t actually been financially impacted by CV-19.
Edited by anonymous-user on Sunday 31st May 07:34
g3org3y said:
So what do you chaps reckon, unethical to defer if you can pay?
There's a LOT of people taking whatever advantage they can from the current situation, from taking £50k loans whilst intending to bin their company right down to taking a mortgage holiday they don't need. I'm hoping karma catches up on some of them.I have paid the VAT and will be paying my tax in July.
To my mind deferments are for people who are struggling. Additionally, if I keep the cash on my account for a few more months it will earn no interest whatsoever - meanwhile the government will have to borrow that same money from somewhere else. For this reason I see no benefit in my withholding the payments and a worthwhile benefit to the state from paying them.
To my mind deferments are for people who are struggling. Additionally, if I keep the cash on my account for a few more months it will earn no interest whatsoever - meanwhile the government will have to borrow that same money from somewhere else. For this reason I see no benefit in my withholding the payments and a worthwhile benefit to the state from paying them.
I don't think there's anything unethical in not paying a bill before it becomes due.
However personally I prefer to pay these things asap as I hate owing anybody any money. That includes having a credit balance on things like gas/elec, I'd much rather they owed me than me owing them..
However personally I prefer to pay these things asap as I hate owing anybody any money. That includes having a credit balance on things like gas/elec, I'd much rather they owed me than me owing them..
technodup said:
here's a LOT of people taking whatever advantage they can from the current situation, from taking £50k loans whilst intending to bin their company right down to taking a mortgage holiday they don't need. I'm hoping karma catches up on some of them.
Mortgage holiday if you don't need it isn't really helping you, you just pay more interest in the end ... not sure the banks will complain too loudly. There is nothing wrong in taking advantage of any government schemes. None of us know how this is likely to play out, what the longer term impact on society and the economy will be, nor what future support may or not be available.
Personally, i'm certain the government would rather everyone took advantage - they are trying to rescue the economy by flooding it with liquidity.
Personally, i'm certain the government would rather everyone took advantage - they are trying to rescue the economy by flooding it with liquidity.
I luckily have a full time job but my freelance work has gone puff!!
So now I'm minus at the end of every month and digging into savings.
The tax is a payment on account which in itself is unfair as it's based on previous years earnings not taking into account one's current situation.
So in many years of freelancing HMRC has been getting an interest free loan off me which they don't repay until the next year.
So in this case they can fek right off, and wait until Jan even though I have the savings to pay.
Sunak and his lot have not lifted a finger to help all of my mates who were coerced into becoming one person Ltd companies who are now trying to survive on around £700 a month with a very good chance that our industry won't return.
So now I'm minus at the end of every month and digging into savings.
The tax is a payment on account which in itself is unfair as it's based on previous years earnings not taking into account one's current situation.
So in many years of freelancing HMRC has been getting an interest free loan off me which they don't repay until the next year.
So in this case they can fek right off, and wait until Jan even though I have the savings to pay.
Sunak and his lot have not lifted a finger to help all of my mates who were coerced into becoming one person Ltd companies who are now trying to survive on around £700 a month with a very good chance that our industry won't return.
Stay in Bed Instead said:
I didn't defer my quarterly VAT payment as I don't consider that 'my' money.
I will likely defer the on account tax payment though as I do consider that my money until such time as HMRC demand it off me. If they don't want until Jan 2021 that is when I will pay it.
Exactly this.I will likely defer the on account tax payment though as I do consider that my money until such time as HMRC demand it off me. If they don't want until Jan 2021 that is when I will pay it.
My accountant advised to pay the VAT (which i did) but defer the payment on account - more than happy to do this
I've been lucky not to have been badly affected by Covid - work has slowed up but I've always kept a high cash balance to tide me over the lean periods and am seeing this as such. I've got the money to pay the VAT bill so haven't even considered deferring it, or taking any of the loans and incentives. Just haven't needed them. As I see it, the Government has dug deep to get us through this and necessarily has had to put fairly light controls around it to ensure it happened quickly for the right reasons. It'll cost us dear so we do have a moral responsibility not to abuse this facility if we don't need to. To do so is little different from benefit fraud.
Unfortunately, I'm sure there will be those who've seen this as a free-for-all and been quick to take the cheap and easy money when they don't really need to. They'll probably be the first to make a big deal about the unreasonableness of tax hikes when this is all over. Personally, I hope that there is some longer term audit of who took the money and some effort to reconcile the advances the Government extended to them at the time, with future repayment somehow. That would have to be fair though.
I'm encouraged that there appear to be more than a few who have taken the same position as me on here.
Unfortunately, I'm sure there will be those who've seen this as a free-for-all and been quick to take the cheap and easy money when they don't really need to. They'll probably be the first to make a big deal about the unreasonableness of tax hikes when this is all over. Personally, I hope that there is some longer term audit of who took the money and some effort to reconcile the advances the Government extended to them at the time, with future repayment somehow. That would have to be fair though.
I'm encouraged that there appear to be more than a few who have taken the same position as me on here.
croyde said:
I luckily have a full time job but my freelance work has gone puff!!
So now I'm minus at the end of every month and digging into savings.
The tax is a payment on account which in itself is unfair as it's based on previous years earnings not taking into account one's current situation.
So in many years of freelancing HMRC has been getting an interest free loan off me which they don't repay until the next year.
So in this case they can fek right off, and wait until Jan even though I have the savings to pay.
Sunak and his lot have not lifted a finger to help all of my mates who were coerced into becoming one person Ltd companies who are now trying to survive on around £700 a month with a very good chance that our industry won't return.
Very much this. No issue at all with people deferring payments on account, it's a ridiculous system anyway.So now I'm minus at the end of every month and digging into savings.
The tax is a payment on account which in itself is unfair as it's based on previous years earnings not taking into account one's current situation.
So in many years of freelancing HMRC has been getting an interest free loan off me which they don't repay until the next year.
So in this case they can fek right off, and wait until Jan even though I have the savings to pay.
Sunak and his lot have not lifted a finger to help all of my mates who were coerced into becoming one person Ltd companies who are now trying to survive on around £700 a month with a very good chance that our industry won't return.
If it's money owed, fair enough, pay it, but I'll be damned if I'm paying up front for next year's 'estimated' tax bill when I have next to zero income and everyone else is sat around on an 80% government-paid holiday.
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