Self-assessment customers have until 1 April 2022 to pay their 2020/21 tax bill or set up an online payment plan to spread the cost into manageable monthly instalments.

Outstanding balances are already accruing interest. From 1 February, this stood at 2.75% before rising to 3% on 21 February. However, the interest is set to rise to 3.25% from 5 April 2022.

But for those who miss the 1 April deadline, they will be hit with a 5% penalty on the outstanding balance. Additional penalties are enforced at six months  – August 2022 (5% of the tax you owe or £300, whichever is greater) and 12 months late – February 2023 (5% of the tax you owe or £300, whichever is greater, though in some cases you may have to pay up to 100% of the tax owed).

The usual 31 January 2022 deadline for tax returns was pushed back and HMRC waived the late filing penalty for anyone submitting their return by 28 February.

Myrtle Lloyd, HMRC’s director general for customer services, said: “We understand some customers might be worrying about paying their Self-assessment bill this year, and we want to support them. There is still time to set up a payment plan – to see if you’re eligible go to GOV.UK and search ‘pay my Self-assessment’.”

The Time to Pay service is available for businesses and individuals who have filed their Self-assessment tax return and owe up to £30,000. They can set up a payment plan online at GOV.UK without speaking to HMRC.

If customers owe more than £30,000, or need longer to pay, they can call the self-assessment payment helpline on 0300 200 3822.