HMRC is waiving late filing and late payment penalties for Self Assessment taxpayers for one month – giving them extra time, if they need it, to complete their 2020/21 tax return and pay any tax due. HMRC state that they recognise the pressure faced this year by Self Assessment taxpayers, and their agents, to meet their obligations due to COVID-19.
However, HMRC urge taxpayers to file and pay on time if they are able to, as the department reveals that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.
The deadline to file and pay remains 31 January 2022.
The penalty waivers will mean that:
- Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February
- Anyone who cannot pay their Self Assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April
Some points to note:
- Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible
- Returns filed in February will be classed as late and HMRC will have an extended period to enquire into them
- The existing Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self Assessment taxpayers with up to £30,000 of tax debt are able to do this online once they have filed their return
- The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers must declare any grants or payments from the COVID-19 support schemes up to 5 April 2021 on their Self Assessment, as these are taxable, including:
- Self-Employment Income Support Scheme (SEISS)
- Coronavirus Job Retention Scheme (CJRS)
- Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme
- The £500 one-off payment for working households receiving tax credits should not be reported in Self Assessment
We urge you, where possible, to still submit your return by the 31 January deadline, only using this penalty waiver if you really must and where there are reasonable grounds for you to be able to say that the return could not be submitted on time.
If you would like to discuss your specific situation in more detail, or need some help with your tax return, contact us as soon as possible by speaking to your PM+M adviser or by emailing email@example.com.