HM Revenue and Customs (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 to 2021 tax return and pay any tax due.
HMRC recognises the pressure faced this year by Self Assessment taxpayers and their agents. COVID-19 is affecting the capacity of some agents and taxpayers to meet their obligations in time for the 31 January deadline. This year, like last year, HMRC is not charging late filing penalties for a month to help taxpayers and agents who are unable to meet the deadline. Late filing penalties will not be charged for online tax returns received by 28 February.
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
Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible.
The 2020 to 2021 tax return covers earnings and payments during the pandemic. Taxpayers will need to declare if they received 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
Coronavirus Job Retention Scheme
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.
Self Assessment timeline:
31 January – Self Assessment deadline (filing and payment)
1 February – interest accrues on any outstanding tax bills
28 February – last date to file any late online tax returns to avoid a late filing penalty
1 April – last date to pay any outstanding tax or make a Time to Pay arrangement,
to avoid a late payment penalty
1 April – last date to set up a self-serve Time to Pay arrangement online
There is no change to the filing or payment deadline and other obligations are not affected. This means that:
interest will be charged on late payment. The late payment interest rate is 2.75%
a return received online in February will be treated as a return received late, with 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 supports taxpayers who may need help with their tax liabilities and cannot pay in full. Once they have filed their 2020 to 2021 tax return, taxpayers can set up an online Time to Pay arrangement to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments.