Self Assessment Late Filing 2021

Self Assessment tax returns were due to be filed by 31 January 2021 but with less than a week to go to the deadline HMRC decided to extend the deadline for submission to 28 February 2021 without penalty.

What does this mean?

Normally a tax return filed after the deadline of 31 January would incur an immediate penalty of £100 but this penalty will not now be applied to returns submitted during February.  It will apply to returns submitted after 28 February and will increase if the return is subsequently more than 3 months late.

Whilst there will be no late submission penalty interest will be charged on payments received after 31st January.  So to avoid interest charges you should have paid your tax bill by 31st January. Interest is charged on a daily basis and will be calculated on the outstanding amount from 1 February 2021.  Any tax that remains outstanding will be charged a late payment penalty of 5% of the amount still due.

What if I can’t pay?

It is always helpful to pay some of your tax bill if you can but you can arrange to pay the outstanding amount over 12 months.  This needs to be done prior to 3 March to avoid the late payment penalty, although the penalty will be applied if you don't keep to the terms of the payment plan.

This link to HMRC will enable you to set up a monthly payment plan which can incorporate your July 2020 payment on account.  You will need your Government Gateway login and password to apply for this.

You can arrange monthly payments if:

You owe £30,000 or less

• You don’t have any other HMRC payment plans or debts
• Your tax returns are up to date
• It is less than 60 days since the payment deadline (i.e. before 1 April 2021)

If you are not eligible, can’t apply online or need a longer payment plan you can telephone the Payment Support Service on 0300 200 3835 between 8am and 6pm Monday to Friday.

Don’t bury your head in the sand!

It has been a difficult year for many individuals and businesses and HMRC have provided the option to set up a payment plan to spread tax payments so it is worth taking advantage of this.  There is no advantage in ignoring your tax return or tax bill because you will continue to receive penalties and interest charges until you make an arrangement with HMRC.