More time for tax

The taxman is not usually known for generosity. However this year HM Revenue and Customs (HMRC) recognises has been a difficult year. HMRC recognises the pressure faced by Self Assessment taxpayers and their agents. COVID-19 is affecting the capacity of some to meet their obligations in time for the 31 January deadline.

As a result HMRC is waiving some late filing and late payment penalties. Self Assessment taxpayers will have one month extra to complete their 2020/21 tax return and pay any tax due. Ordinarily anyone filing after the 31 January would be liable to late filing and late payment penalties. This year the penalties will be waived as long as your tax return is in by 28 February.

Similar waivers are available for late payment of tax. Anyone who cannot pay their Self Assessment tax by the 31 January will not receive a late payment penalty. However they must pay their tax in full, or set up a Time to Pay arrangement, by 1 April 2022.

That said, the official deadline for filing and payment remains 31 January 2022. The significance of keeping the date is that interest on unpaid tax will still be charged from 1 February. So although you won’t have penalties for later payment, you will need to pay any interest accrued on the tax outstanding between 1 February and the date you make payment.

HMRC tell us that almost 6.5 million have already submitted their tax return as of today. But that is out of an estimated 12.2 million taxpayers due to submit their tax return by 31 January,.

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