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HMRC waives late filing and late payment penalties for a month

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Written by: Emma Lunn
06/01/2022
Self-assessment taxpayers have been given more time to file their tax returns and pay their tax bills to help with the financial pressures caused by the pandemic.

The move means taxpayers have up until the end of February to complete their 2020/21 tax return and pay any tax due.

However, HMRC is encouraging taxpayers to file and pay on time if they can. It said 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.

The tax office said it “recognises the pressure faced this year by self assessment taxpayers and their agents. 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 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.

The waivers also mean that 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.

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, 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.”

The Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self-assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.    

The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers will need to declare if they received any grants or payments from the Covid-19 support schemes up to 5 April 2021 on their tax return, as these are taxable.

These payments include the Self-Employment Income Support Scheme (SEISS) grants, self-isolation payments, local authority grants and payments under the furlough scheme. 

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