The Self Assessment tax return deadline is approaching, and like last year, HMRC has extended the deadlines for late filing and payment penalties.
The extensions were introduced last year to ease the financial burden on taxpayers and agents in the wake of the Coronavirus pandemic and have been extended again this year as it recognises the pressure the Omicron variant and the continuing disruption the pandemic has caused to individuals and to businesses.
We look at the key updates to the 2020/21 Self Assessment deadlines and how you benefit.
HMRC announced on 6 January 2022 that there would be no late filing penalties issues provided the Self Assessment tax returns are submitted prior to 28 February 2022. Penalties starting from £100 will then commence from 1 March 2022.
Taxpayers are typically required to submit and pay any taxes they owe by 31 January each year.
This year HMRC have said that there will be no late payment penalties issued provided taxpayers pay their tax bill or set up a payment plan by 1 April 2022.
From 1 April 2022, late payment penalties issued will start from 5% of your tax bill. So if you owe taxes it is important to at least have a payment plan in place prior to this date.
Self-employed taxpayers will welcome the deadline extensions as January is typically a hectic time of year for the self-employed as clients begin to ramp-up their marketing for the new year and demand increases after the wind-down leading into the festive season.
However, it is recommended that if you can complete your Self Assessment tax return and pay any taxes due by 31 January then you should, as you will still face having to pay interest on what you owe if you submit your return and payment late. Late payment interest is currently charged at 2.75%.
Returns filed in February with a valid reason for lateness will be treated as a return received late, meaning:
It is important to contact HMRC as soon as possible if you are struggling to pay the tax that you owe, as you may be able to set up a payment plan to help you spread the financial burden.