HMRC has announced that Self Assessment taxpayers will not be charged the usual 5% late payment penalty if they pay their tax or have a payment arrangement in place by 1st April.
Whilst interest is charged on any unpaid amounts that were originally due on the 31st January, this 5% penalty is usually charged on any tax that hasn’t been paid by 3rd March. This year, because of the pandemic, this has been extended to the 1st April.
An initial late filing penalty will still be charged for any Self Assessment Tax Return that hasn’t been submitted by 28th February 2021 (extended from the original 31st January deadline) so it’s essential that unfiled Returns are submitted by this point.
Remember that interest will continue to accrue on any amounts unpaid.
How do I set up a payment plan?
There are two ways to do this.
1 To set up a payment plan online, you will need to follow this link. You will need your Gateway information to be able to log in, and have your Unique Taxpayer reference (UTR) together with details of your liability and due dates. You can find out what other information you’ll be asked for here. There are some criteria that apply:
The criteria are as follows:
- You must owe less than £30,000. (There is a lower limit of £32, but we have no idea how this was calculated!)
- You must not have any other debts or payment plans with HMRC.
- If you default on any of the payments, HMRC can ask you to immediately pay all that you owe.
- You must have submitted your 2019/20 Tax Return.
- Any tax must have been due within the last 60 days.
2 If you do not meet the above criteria, you will need to speak to HMRC to discuss a payment plan. You can do this by calling the Self Assessment Payment Helpline on 0300 200 3822, open Monday to Friday 8am to 4pm.
HMRC has revealed that over 97,260 customers have already set up a self-serve time-to-pay arrangement online, totalling more than £367 million.
Another reason to get your Return in!
We think the extended 28th February filing deadline may be particularly important if there is more Coronavirus support to come for the Self Employed following the Budget, due on the 3rd March.
Missing it may incur more than a £100 penalty if it excludes you from a future support claim!
If you need to discuss either your personal tax affairs or paying any liability, please get in touch. We cannot make the arrangement for you, but are happy to talk through the information HMRC may ask for and any potential affordability issues you may have.