The standard deadline for individuals filing a tax return is 31 January. Failure to meet this deadline usually means a £100 automatic penalty applies, even if no tax is owed.
HMRC has acknowledged the ongoing pressure on taxpayers arising from the coronavirus pandemic and the knock-on effect it is having on self-assessment filing. It is estimated that over 5 million tax returns were filed in January ahead of the 31 January deadline.
To ease the pressure, HMRC has announced that no automatic penalty for a late return will be issued as long as the filing is made by 28 February.
Despite waiving the late filing and payment penalty, late payment interest will still accrue from 1 February 2022, acting as an incentive to pay early.
Additionally, no late payment penalty will apply if payment is made in full by 1 April (or the taxpayer agrees a payment plan before that date).
Care is needed where the taxpayer is self-employed – especially if 2020/21 is the first year of trading. Class 2 NI is collected via self-assessment but administered by a separate department.
Kim Redwood-Lee commented: “Late payment of the modest liability can put entitlement to certain welfare payments at risk. Taxpayers should contact HMRC to make a separate payment to avoid problems”.
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About Oscar Fairchild: Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an ACCA chartered and certified and AAT qualified accountancy, financial consultancy & bookkeeping practice with offices in The City of London, and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses and licensed London taxi drivers across London, Essex and Hertfordshire.
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