HMRC has confirmed that taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by midnight on 1 April 2021. Under the normal rules a 5% late payment penalty would have been charged if tax remained outstanding or a payment plan has not been set up before 3 March 2021. This extension was put in place due to the impact of the COVID-19 pandemic and gives taxpayers an extra 4 weeks to sort out their affairs before the 5% late payment penalty is levied.
It is important to note that it is only the 5% penalty that is being waived. Interest will be applied to any balance that was outstanding from 1 February 2021. The only way to stop further interest amassing is to pay any tax due in full.
HMRC had previously announced that the late filing penalty of £100 for taxpayers that file their Self-Assessment returns late will be waived until 28 February 2021. More than 1.5 million taxpayers missed the normal 31 January 2021 deadline.
If you are unable to pay your tax bill, then there are a number of options for you to defer the payment that was due on 31 January 2021. This includes an option to set up an online time to pay payment plan to spread the cost tax due on 31 January 2021 for up to 12 months. This option is available for debts up to £30,000 and the payment plan needs to be set up no later than 60 days after the due date of a debt.
If you owe Self-Assessment tax payments of over £30,000 or need longer than 12 months to pay in full, you can still apply to set up a time to pay arrangement with HMRC, but this cannot be done using the online service.
If you need to file a tax return that remains outstanding, don’t sit on it, call the MJB Avanti team to see how we can help you (08000) 388 799
Source: Informanagement