UK and International Tax news
HMRC Confirms Late Payment Penalties Waived Until 1 April
Monday 22nd February 2021
HMRC has confirmed that Self Assessment taxpayers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021.
The payment deadline for Self Assessment is normally 31 January following the end of the tax year and interest is charged from 1 February on any amounts outstanding. A 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. Further late payment penalties are charged at six and twelve months (August 2021 and February 2022 respectively), on tax outstanding where a payment plan has not been set up.
However, for this year, because of the impact of the COVID-19 pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan. Taxpayers can pay their tax bill or set up a monthly payment plan online at GOV.UK by midnight on 1 April to prevent being charged a late payment penalty. The online Time to Pay facility allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.
HMRC says it recognises the pressure affecting taxpayers due to the pandemic, and is now encouraging anyone worried about paying their tax and unable to set up a payment plan online to contact HMRC for help and support.
According to HMRC, so far more than 97,000 taxpayers have set up a self-serve time to pay arrangement online, totaling more than £367m.
This announcement is in addition to last month’s announcement that HMRC will not charge late filing penalties for tax returns filed online by 28 February 2021.
This is the first time HMRC has delayed the charging of penalties for late payment of Self Assessment tax liabilities.
Self-serve Time to Pay will allow taxpayers to set up a payment plan online to help them manage the cost of their tax bill up to £30,000. If a taxpayer’s Self Assessment debts are more than £30,000, or they need longer to pay a debt in full, they should call the Self Assessment Payment Helpline at HMRC.
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