There has been an announcement from HMRC this morning in relation to Self-Assessment taxpayers. The statement has shared that Self-Assessment taxpayers are to be given more time to complete and submit their tax return to “ease COVID-19 pressures.”
HM Revenue and Customs (HMRC) is waiving late filing and late payment penalties for a month – giving Self-Assessors extra time, if they need it, to complete their 2020 to 2021 tax return and pay any tax due.
HMRC continues to encourage taxpayers to file and pay on time if they can, and the department has disclosed that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.
HMRC has said it “recognises the pressure faced this year by Self Assessment taxpayers and their agents.” and they recognise that “COVID-19 is affecting the capacity of some agents and taxpayers to meet their obligations in time for the 31 January deadline.”
The penalty waivers give taxpayers who need it more time to complete and file their return online and pay the tax due without worrying about receiving a penalty.
The deadline to file and pay remains 31 January 2022 but the penalty waivers 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
It is worth noting that HMRC have said that “Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible.”
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19. Our decision to waive penalties for one month for Self Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.”
Lucy Frazer, Financial Secretary to the Treasury, said: “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs.
Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.”
So, to summarise:
Penalties won’t be charged if the return is filed by 28th February 2022 but HMRC will charge late payment interest of 2.75% pa from 1st February 2022. So, the pressure is off a little but our advice remains that it is still best to get the returns in by 31 January if possible.