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HMRC has announced that it will waive two penalties relating to this year’s 31 January Self Assessment returns.
As they did last year, HMRC are giving extra time to those who are filing Self Assessment tax returns whilst encouraging their customers to pay on time if possible, joining the 6.5 million who have done so to date.
The two waivers are:
- Late filing penalties for those who file online by 28 February 2022.
- Late payment penalties for those who pay the tax due in full or set up a payment plan by 1 April 2022.
The Time to Pay scheme is also still in operation. Once their 2020-21 tax return is filed, a customer can set up an online payment plan 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 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, 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 payments. The late payment interest rate from 4 January 2022 is 2.75%
- A return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness. In this case:
- 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 late payment penalty of 5% 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.
- a late filing penalty will not be charged for Trust & Estate Returns (SA900), & Partnership Returns (SA800) if customers file online by the end of February. The deadline for filing SA900s and SA800s on paper was 31 October. Customers who file late on paper will be charged a late filing penalty in the normal way and they can appeal against this penalty if they have a reasonable excuse for the late filing of their return.
- 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 ensure 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:
- could not 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.
Enquiries can be made to HMRC by calling 0300 200 3822.
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