HMRC have advised that no late filing penalties will be issued if outstanding self-assessment (SA) for 2020-21 are filed by 28 February 2022. And further, no late payment penalties will be charged for tax normally due 31 January 2022 as long as payment is made to HMRC by 1 April 2022 or a payment plan has been agreed with HMRC by the same date, 1 April 2022.

The changes will affect taxpayers who have still not filed their 2020-21 SA tax return and may be unable to settle any tax and NIC due by the usual 31 January 2022 payment deadline.

Theses concessions by HMRC acknowledge the continuing disruption experienced by many taxpayers due to COVID-19.

Formal filing deadline remains 31 January 2022

The formal filing deadline for 2020-21 SA returns remains 31 January 2022. The change announced will treat returns filed during February 2022 as received late BUT with a reasonable excuse for late filing. The other late filing penalties – daily penalties from 3-months, 6 and 12-months – will operate as usual.

Late payment penalties

A 5% late payment penalty will be charged if tax remains unpaid, and a payment plan has not been set-up, by midnight on 1 April 2022.

Further late payment penalties will be charged at the usual 6 and 12-month dates (August 2022 and February 2023).

Late payment plan

To avoid penalties for late payment, if you cannot clear all SA tax and NIC due as of 31 January 2022, you can agree a plan to clear amounts due by monthly instalments. As long as you reach agreement on a Time to Pay arrangement before 1 April 2022, no late payment penalties will apply.

For most SA taxpayers with tax liabilities of £30,000 or less an application can be made using HMRC’s online, self-serve Time to Pay facility. If this is not possible, taxpayers should contact HMRC’s Time to Pay team on 0300 200 3822.

PLEASE NOTE interest will still be charged on late payments and the rate charged will be 2.75%.

We recommend

To avoid missing the extended, 28 February filing date we recommend that you complete and file your outstanding 2020-21 SA return as soon as possible. This process will quantify any taxes due and give you time to consider your payment options; including contact with HMRC to agree a formal Time to Pay arrangement before 1 April 2022

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