Self Assessment Filing Penalties Deferred

Filing Penalties Deferred

HMRC have announced that penalties relating to late filing and late payments of Self Assessment tax is to be waived for 1 month.

The announcement was made on 6th January 2022 and it relates to tax returns for the tax year 2020/21.

We go through the announcement in more detail below.

Who is eligible?

The tax return 2020/21 filing penalties and payment penalties are deferred for all taxpayers.

What is the new tax return filing deadline?

HMRC are still encouraging taxpayers to file their 2020/21 tax returns by 31st January 2022.

What has changed in this announcement is HMRC won’t raise a penalty if the tax return is filed by 28th February 2022.

What is the new tax payment deadline?

We would still recommend making the payment by 31st January 2022 , if possible.

What has changed in this announcement is HMRC won’t raise a penalty if the payment is made (or a payment plan is in place) by 1st April 2022.

Should taxpayers just pay the tax due in March 2022?

Only the penalties are deferred. HMRC will still charge interest on payments made after 1st February 2022.

The current interest rate charged by HMRC is 2.75% (this was increased 4th January 2022).

What should I do if I can’t pay the full amount?

If you are in a position where you can’t pay the full amount immediately try splitting the payments into 3. Pay as much as you can in January 2022 , then pay as much as you can in February 2022, followed by a final payment in March 2022.

This will spread the liability over 3 months, avoid any penalties and keep the interest charged to a minimum.

How do I make a time to pay arrangement with HMRC?

Phone HMRC on 0300 200 3822 and they will help set up a payment plan.

Here is a link to HMRC with more information on payment plans.

Conclusion on the late filing and late payment extension

Covid and the spread of the new Omicron variant is having a significant impact on some businesses staffing levels. This has been recognised by HMRC as a potential issue for some taxpayers meeting their filing obligations.

We would recommend that taxpayers try to meet the original filing and payment deadlines of 31st January 2022. Only consider the extensions as a safety net if needed.

For further information on this announcement see HMRC Press Release on 2020/21 Tax Return Extensions

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