HMRC gives Self-Assessment taxpayers more time to ease COVID-19 pressures
Late filing and late payment penalties are to be waived for one month for Self-Assessment taxpayers.
The deadline to file and pay remains 31 January 2022 however the extension of the deadline means that anyone who cannot file their return by the end of January will not receive a late filing penalty if they file online by 28 February 2022.
The waiver also means that anyone who cannot pay their self-assessment tax by the 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. HMRC states that interest will still be payable from 1 February as usual.
HM Revenue and Customs (HMRC) is waiving late filing and late payment penalties for Self-Assessment taxpayers for one month, effectively delaying the tax return deadline to 28 February 2022, giving them extra time, if they need it, to complete their 2020 to 2021 tax return and pay any tax due.
HMRC is encouraging taxpayers to file and pay on time if they can, as the department reveals 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.
HMRC 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 2022 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 deadline to file and pay remains 31 January 2022. The penalty waivers will mean that:
anyone who cannot file their return by the 31 January 2022 deadline will not receive a late filing penalty if they file online by 28 February 2022
anyone who cannot pay their Self-Assessment tax by the 31 January 2022 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 2022
Interest will be payable from 1 February 2022, as usual, so it is still better to pay on time if possible.
Self-Assessment revised timeline:
31 January 2022 – Self Assessment deadline (filing and payment)
1 February 2022 – interest accrues on any outstanding tax bills
28 February 2022 – last date to file any late online tax returns to avoid a late filing penalty
1 April 2022 – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment penalty
1 April 2022 – last date to set up a self-serve Time to Pay arrangement online
There is no change to the filing or payment deadline and other obligations are not affected. This means that:
interest will be charged on late payment. The late payment interest rate is 2.75% a return received online in February 2022 will be treated as a return received late, with a valid reasonable excuse for the lateness. This means that:
there will be an extended enquiry window for returns filed after 28 February 2022 the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual
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.
Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.
HMRC will not charge late filing penalties for SA700s and SA970s received in February 2022. These returns can only be filed on paper.
For SA800s and SA900s HMRC will not charge a late filing penalty if taxpayers file online by the end of February 2022.
The deadline for filing SA800s and SA900s on paper was 31 October 2021. Taxpayers who file late on paper will be charged a late filing penalty in the normal way. They can appeal against this penalty if they have a reasonable excuse for filing their paper return late.
HMRC supports taxpayers who may need help with their tax liabilities and cannot pay in full. Once they have filed their 2020 to 2021 tax return, taxpayers can set up an online Time to Pay arrangement to spread Self-Assessment bills of up to £30,000 over up to 12 monthly instalments.
Taxpayers can apply for self-serve Time to Pay via GOV.UK. Interest will be applied to any outstanding balance from 1 February 2022. Taxpayers with Self-Assessment debts over £30,000, or who need longer than 12 months to pay, may still be able to set up a Time to Pay arrangement by calling the Self-Assessment Payment Helpline on 0300 200 3822.
COVID-19 support schemes
This year, tax payer will also have to declare if they have received any grants or payments from COVID-19 support schemes up to 5 April 2021, as these are taxable. This includes:
- Self-Employment Income Support Scheme (SEISS)
- Coronavirus Job Retention Scheme (CJRS)
- other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme.
Visit GOV.UK and search 'reporting coronavirus grants' to find out which COVID-19 grant or support payments to include on your tax return if you're self-employed, in a partnership or a business.
If you need guidance please contact us at email@example.com or call us on +44 (0)1932 849023.