Self-Assessments: filing deadline extended, but late payment fine remains
In response to the disruption caused by the Covid 19 pandemic, HMRC have extended the filing deadline for online self-assessment tax returns.
If you’re not able to file by 31st January, you have another month to get your return submitted.
Late filing penalties won’t be applied until after 28th February 2022. However, HMRC are still expecting payment, even without a filed return. You’ll be charged late payment interest if you don’t pay your tax bill in full by 31st January.
How much will you be charged for late payment?
The late payment interest is charged at 2.75% of the tax you owe. This is charged daily until the liabilities are paid. With a further 5% penalty added 1st April.
How are you supposed to know how much tax to pay without submitting a return?
You might choose to compare the 20/21 year against other years to guess at your income tax bill.
HMRC have a tool that allows you to estimate your income tax for previous years to give a rough idea of your liabilities. Explore the tool here: https://www.gov.uk/check-income-tax
Even with this method, you still run the risk of a late payment interest penalty if you underpay your tax bill.
What if you can’t afford to pay your tax bill?
HMRC offer payment plans to spread the cost over 12 months.
You must meet the filing deadline of 31st January to be able to apply, so make sure your return is submitted on time.
Individuals can set up their own payment plans online. To create a payment plan, visit: https://www.tax.service.gov.uk/pay-what-you-owe-in-instalments
To avoid any penalties, make sure your self-assessment is submitted and paid in full or a payment plan set up by 31st January 2022.
If you’re struggling to provide any information, reach out to the team today.