Wisbech accountant looks at self assessment penalties and deadlines

In her fortnightly 'Barwell's Banter' column, Nickie Barwell of Barwell Accountants, discusses self assessment tax returns...

The deadline to file self assessment tax returns for the year ended April 5, 2021 was January 31, 2022. Any tax for the year is also payable by that date.

However, H M Revenue & Customs has announced that late filing and late payment penalties are to be waived for one month.

This is in response to the ongoing Covid 19 pandemic and is aimed at helping agents and tax payers meet their obligations without receiving a penalty.

Therefore, anyone who has not yet filed their return will not receive a late filing penalty if they file online by February 28.

Likewise, anyone who could not pay their self assessment tax by January 31 will not receive a late payment penalty if they pay their tax in full, or set up a time to pay, by April 1. Interest is still payable from February 1 so it is much better to pay on time if possible.

The late payment interest rate is 2.75% and the late payment penalty rate is 5% so tax payers need to try to meet the extended deadlines.

Even though there will be no penalty, returns received in February will be treated as late (with a valid excuse for lateness). This has the resulting effect of extending the enquiry window for HM Revenue & Customs.

Returns that do meet the February 28 revised filing deadline will be subject to the usual late filing penalties, which is £100 for missing the filing deadline.

If it is three months late, then daily penalties of £10 per day for up to 90 days will apply. Further penalties apply at six and 12 months late. The penalty for late payment is 5% of the tax due and this will apply from April 1, provided a payment plan has not been set up.

Once a return has been filed then tax payers can set up an online time to pay agreement via gov.uk, where by they can spread self assessment bills of up to £30,000 over 12 months.

Tax payers with a larger debt than £30,000 or who need longer than 12 months to pay may still be able to get a time to pay agreement but need to call the self assessment payment helpline on 0300 2003822.