Looming Deadline for Self Assessment Tax Payments!

News, Personal Tax,

If you haven’t yet paid  in full or set up an online payment plan for any tax that was due by 31st January 2021, you have until 1st April to do so to avoid penalties!

HMRC has extended the payment deadline so that the usual 5% late payment penalty charge won’t fall due, as long as payment is made OR an arrangement is in place by midnight on the 1st April.

The online Time to Pay application process for Personal Tax was only available until 21st March, so if you haven’t already agreed a plan, you will need to call HMRC on 0300 200 3822 to do so.

So far, almost 117,000 taxpayers have set up an arrangement, covering more than £437 million.

Please note:

  • Although the late payment penalty has been waived where payment is made in full or an arrangement is in place by 1st April, interest will still be due on any amounts unpaid after the original due date of 31st January 2021.
  • If payment isn’t made and NO arrangement is made by 1st April, a 5% late payment penalty will be charged. Further late payment penalties are charged at 6 months (August 2021) and 12 months (February 2022).

Payments on Account – July 2021

If you’re due to make payments on account in July based on your Tax Return from 5th April 2020 and think your income for the year ended 5th April 2021 will be lower, it is possible to apply to reduce those payments on account before 31st July 2021.

Care is needed in doing this, as interest will be due on any amount that may actually be due in excess of what is paid. It’s not something to guess at!

With that in mind, it’s a really good idea to get your Tax Return prepared before 31st July if you think this may apply to you. You can then be sure of your liability for the year and adjust the payment on account accurately.

If you’d like to chat this one through, please get in touch!

 

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