HMRC waives late filing and payment penalties for Self Assessment taxpayers

HM Revenue and Customs (HMRC) has waived late filing and late payment penalties for Self Assessment taxpayers for one month.

The agency said this will give taxpayers more time to ease Covid-19 pressures and complete their 2020/21 tax return and pay any tax due. Last year also, HMRC has not charged late filing and payment penalties for a month.

The deadline to file and pay remains 31 January 2022, but the penalty waivers will mean that those who cannot file their return by this date will not receive a late filing penalty if they file online by 28 February, and anyone who cannot pay their Self Assessment tax by the deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April.

“We know the pressures individuals and businesses are again facing this year, due to the impacts of Covid-19. Our decision to waive penalties for one month for Self Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty,” Angela MacDonald, HMRC’s deputy chief executive and second permanent secretary, said.

HMRC encouraged taxpayers to file and pay on time if they can, adding that almost 6.5 million, out of the 12.2 million taxpayers who need to submit their tax return by 31 January, have already done so. Interest will be payable from 1 February as usual, the agency noted.

The existing Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self Assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.

As the 2020/21 tax return covers earnings and payments during the pandemic, taxpayers will need to declare if they received any grants or payments from the Covid-19 support schemes up to 5 April 2021 on their Self Assessment, as these are taxable.

See HMRC guidance here on reporting Covid-19 grants and support payments.