Interest accruing for two million late tax return filers: act now
January 31st was the tax return deadline and in total, 10.2 million customers filed their 2020/21 self-assessment on time. However, 2.3 million, nearly 20% of the total expected, failed to do so, meaning they now face interest charges.
Last month, HM Revenue & Customs (HMRC) announced it would waive late filing penalties for anyone submitting their return by 28 February as it “recognised the pressures faced due to Covid-19”.
Further, customers have until 1 April to pay tax owed in full, or to set up payments, to avoid a late payment penalty.
However, HMRC is applying interest of 2.75% to outstanding balances from today (1 February) so if you missed yesterday’s deadline, aim to file and pay – or set up a pay plan – or pay an estimated amount as soon as possible to minimise interest charges.
Myrtle Lloyd, HMRC’s director general for customer services, said: “I’d like to thank the millions of customers and agents who sent us their tax return and paid in time for this week’s deadline.
“We’re waiving penalties this year, to give those who missed the deadline an extra month. And customers can set up a monthly payment plan online if they’re worried about paying their tax bill. Search ‘Self Assessment’ on GOV.UK to find out more.”
For returns filed after 28 February the other late filing penalties (daily penalties from three months, six and 12 month penalties) will apply as normal.
Further, a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022. And further late payment penalties will be charged at the usual six and 12 month points.
Related: See YourMoney.com’s How to include SEISS grants on your tax return for more information.