HMRC has extended the ‘season to be jolly’, well, just a little. Announced today that it has extended the filling period, usually January 31st, and when late payment penalties will become due. Good news, but there’s still a catch – interest will still be charged.
HMRC will not charge late ‘filing’ penalties if filings are made by February 28th 2022. The penalty is 5% and is charged on any unpaid tax due. Similarly, it won’t apply late ‘payment’ penalties, provided payment for tax due is made by April 1st 2022, or a payment plan has been set up by that date.
This is consistent with the same waivers HMRC made last year and provides customers and tax representatives with some much needed breathing space, given the difficulties of the past year.
Payment plans are still available
Payment plans, known as ‘Time to pay’ options, are still available and allow self assessment bills up to £30,000 to be spread over 12 months.
However, it should be noted and this is the catch: The actual filing and payment deadlines have not changed. Even though you can choose to file and pay later, interest will still be applied based on the existing deadlines. This means that late payment ‘interest’ still applies during this period, i.e. from Jan 31st onwards. The current late payment interest rate is 2.75%.
HMRC have said:
- A return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness. This means that:
- There will be an extended enquiry window
- For returns filed after 28 February 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.
- We will not charge late filing penalties for SA700s and SA970s received in February – these returns can only be filed on paper
- For SA800s and SA900s we will not charge a late filing penalty if customers file online by the end of February – the deadline for filing SA800s and SA900s on paper was 31 October. Customers 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
- Self-employed customers who need to claim certain contributory benefits soon after 31 January 2022, need to ensure their annual Class 2 National Insurance contributions (NICs) are paid on time – this is to make sure their claims are unaffected. Class 2 NICs are included in the 2020 to 2021 balancing payment that is due to be paid by 31 January 2022. Benefit entitlements may be affected if they:
- Couldn’t pay their balancing payment by 31 January 2022, and:
- Have entered into a Time to Pay arrangement to pay off the balancing payment and other self assessment tax liabilities through instalments.
Still have questions?
We understand that HMRC statements and guidelines are not the easiest things to interpret, so if you still have questions and want us to assist you with your SA100 Tax return, call us today on 020 8108 0090 and talk with one of our specialists in either our London Richmond-Upon-Thames office or our London Putney Office.