Reallocate self-assessment 31 January payment to protect National Insurance benefits

Taxpayers who deferred their July 2020 self-assessment payment on account may have had to pay it along with any 2019-20 balancing charge and the first 2020-21 payment on account on 31 January 2021.

If these were paid through a time-to-pay arrangement the deferred July 2020 payment will be cleared first to minimise the interest. This could however result in the 2019-20 class 2 National Insurance contributions being paid after their due date of 31 January 2021. This can have a detrimental effect on some contributory benefits claimed by taxpayers. HMRC suggests that taxpayers in this position should contact the department as soon as possible as it may be able to allocate the tax paid against the class 2 contributions instead of the July 2020 payment on account. This may cause a small amount of interest being paid but the contributory benefit claim should...