HMRC waives Self Assessment penalties for one month
Posted on 14th January 2022 at 11:08
Self Assessment timeline for 2020/21:
• 31 January 2022 – Self Assessment deadline (paying and filing)
• 28 February 2022 – last date to file any late tax returns to avoid a late filing penalty
• 1 April 2022 – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment penalty
HMRC gives Self Assessment taxpayers more time to ease COVID-19 pressures. On 6th January 2022, HMRC announced that penalties for late filing will not be charged for those who file Self Assessments for 2020/21 online by 28 February 2022 and for those who pay the tax due in full or set up a payment plan by 1 April 2022.
This will give customers and their representatives additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging customers to file and pay on time if they can by 31 January 2022 – almost 6.5 million have already done so.
If you cannot pay your Self Assessment liabilities in full
Time to Pay options are still available to assist tax payers 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 2022 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 customers more time to pay or set up a payment plan. Self Assessment customers 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. They can pay their 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 that:
- interest will be charged on late payment. The late payment interest rate from 4 January 2022 is 2.75%
If you file your tax return after 31 January 2022 and by 28 February 2022
A 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.
Affected customers should contact HMRC on 0300 200 3822 for help as soon as possible.
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.
How we can help
The rules and changing deadlines can cause confusion. If you require assistance or tax advice, please contact a member of our team on 0333 772 7753 or email [email protected]
Tagged as: Self Assessment
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