News
Self-assessment filing date extension – making the deadline is still your best bet.
11 Jan 2022
By Paul Brown, Tax Partner
For those taxpayers who are struggling to file their 2020/21 self-assessment tax returns HMRC have thrown them a potential lifeline – but not a complete “get out of jail free” card… Due to the ongoing impact of the Covid pandemic HMRC have said that they will not impose the £100 late filing penalty if a taxpayer misses the 31 January deadline but manages to file their self-assessment return online by 28 February this year. Late filing of paper self-assessment returns (which are already late!) will not benefit from the concession. Similarly, 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 with HMRC, by 1 April.
Interest payments on late paid tax
The sting in the tail though is that the government has confirmed that despite these relaxations, interest on late paid tax will still apply from 1 February as normal. Given the rate has just been increased to 2.75% (following the recent Bank of England rate increase) this is perhaps not a huge cost but still one best avoided if possible. What this in effect means is that. To avoid late payment interest taxpayers will still have to calculate and pay their tax by 31 January in any event. Given that you would have to do most of the work in pulling together your tax information in order to accurately calculate your tax, it does beg the question why not just complete your tax return in any event?
The concession is clearly a welcome one but is not as generous as it might have been. We would encourage those who have still to file their returns to try to do so by 31 January as normal, taking the concession on the imposition of penalties as being a fall-back position and no more.
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