BARWELL'S BANTER: Self assessment, penalties and payment plans
Nearly 10.75 million people submitted their self assessment tax returns for the year ended April 5, 2020 before the January 31, 2021 deadline. However, this is over 11 million fewer than the record number who filed on time last year.
HM Revenue & Customs have confirmed that the near two million taxpayers whose return is now overdue will not be subject to a late filing penalty, as long as their return is filed by February 28, 2021. This extension is due to the ongoing Covid-19 pandemic.
Taxpayers need to realise though that, if submitted in February, their return will still be treated as late and as such:
lThere will be an extended enquiry window;
lReturns filed after February 28 will still attract the usual late filing penalties;
lThe payment deadline was not moved so any tax remains due by January 31, 2021 and interest will be levied on any tax paid late;
lFurthermore, a 5% late payment penalty will be imposed if tax is still outstanding before March 3, 2021 (and a payment plan has not been set up). Then, further late payment penalties come into force at six and 12 months on outstanding tax not covered by a payment plan.
We would urge anyone who missed the January 31 deadline to try and meet the February 28 deadline to avoid the fine.
If you think you will be unable to pay any tax liability by the due date then please contact HMRC to arrange a payment plan.
You can set up a self assessment payment plan online to spread the cost of your latest tax bill if:
lYou owe £30,000 or less;
lYou do not have any other payment plans or debts with HMRC;
lYour tax returns are up to date;
lIt’s less than 60 days after the payment deadline.
This is the link to set up a self assessment payment plan : www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments
If you are not eligible for a payment plan or cannot use the online service, call the self assessment payment helpline on 0300 2003822 (Monday to Friday, 8am to 6pm).