Today HMRC has announced that they will not charge:
- Late filing penalties for those who file online by 28 February 2022.
- Late payment penalties for those who pay the tax due in full or set up a payment plan by 1 April 2022.
This will give tax payers additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging everyone to file and pay on time if they can.
Time to Pay options are still available to assist you and once the 2020-21 tax return has been filed, you will be able to set up an online payment plan to spread Self Assessment bills of up to £30,000, over and up to 12 monthly instalments.
The payment deadline for Self Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding. Normally a 5% late payment penalty is charged on any unpaid tax that is still outstanding on 3 March. This year, like last year, HMRC is giving more time to pay or set up a payment plan. Self Assessment tax payers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by midnight on 1 April.
You can pay your tax bill or set up a monthly payment plan online at GOV.UK.
There is no change to the filing or payment deadline and other obligations are not affected. This means the following:
- interest will be charged on late payment (from 1 February 2022). The late payment interest rate is 2.75%
- a return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness. This means that there will be an extended enquiry window
- for returns filed after 28 February the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual
- a 5% late payment penalty will be charged if tax remains outstanding, 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 points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.
- HMRC will not charge late filing penalties for SA700s (Non-resident Company Income Tax Returns) and SA970s (Tax Return for trustees of registered pension schemes) received in February – these returns can only be filed on paper
- for SA800s (partnership tax returns) and SA900s (Trust and Estate Returns) HMRC will not charge a late filing penalty if these are filed online by the end of February – the deadline for filing SA800s and SA900s on paper was 31 October. Tax payers who file late on paper will be charged a late filing penalty in the normal way, they can appeal against this penalty if they have a reasonable excuse for filing their paper return late
- self-employed customers who need to claim certain contributory benefits soon after 31 January 2022, need to ensure their annual Class 2 National Insurance contributions (NICs) are paid on time – this is to make sure their claims are unaffected. Class 2 NICs are included in the 2020 to 2021 balancing payment that is due to be paid by 31 January 2022. Benefit entitlements may be affected if they couldn’t pay their balancing payment by 31 January 2022, and have entered into a Time to Pay arrangement to pay off the balancing payment and other self assessment tax liabilities through instalments. If you are affected by this you should contact HMRC on 0300 200 3822 for help as soon as possible.
