HMRC announces more help for Self-Assessment Taxpayers

HMRC has announced that taxpayers will not be charged the 5% late payment penalty if they pay their tax bill or set up a payment plan by the 1^st of April 2021.

Avoid the 5% late payment penalty

The payment deadline for the self-assessment tax return is usually the 31^st of January, and interest is automatically charged from the 1^st of February on any outstanding amounts. A 5% late payment penalty is also charged on any unpaid tax from the 3^rd of March. However, in light of the coronavirus pandemic, HMRC is taking a more lenient approach and is giving taxpayers more time to pay their tax bill or set up a payment plan.

This year, taxpayers will not be charged a 5% late payment penalty as long as they pay their tax bill or set up a payment plan by the 1^st of April 2021. This must be done by midnight on the 1^st of April, or a late payment penalty will be applied. Further late penalties will also be applied at 6 and 12 months (August 2021 and February 2022) on any tax outstanding where a payment plan has not been set up.

HMRC advises, where possible, taxpayers pay their bill in full because this is the only way to stop interest accruing. There are several ways for you to pay your self-assessment tax bill, such as by post, online or via your bank. Self-assessment taxpayers who have yet to file their 2019/20 tax return should file by the 28^th of February 2021 to avoid a late filing penalty of £100.

Benefit from a Time to Pay arrangement

Many small businesses and individuals have suffered financially due to the coronavirus, and the prospect of having to pay a tax bill in one go can seem daunting. With HMRC’s self-serve Time to Pay arrangement, you can set up an online payment plan which allows you to pay your self-assessment tax bill in monthly instalments up to January 2022. More than 97,260 taxpayers have already set up a payment plan online, totalling more than £367 million.

Jim Harra, HMRC’s Chief Executive, said:

“Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at GOV.UK to help anyone struggling to meet their obligations.”

If you are worried about paying your tax bill and cannot set up a payment plan online, HMRC is urging you to contact them immediately for help and support. They have a dedicated payment hotline which you can call – 0300 200 3822.

Enlist our expert Personal Tax team to complete your self-assessment tax return

Our dedicated Personal Tax team has completed over 25,000 tax returns and will save you hours of time and stress. Our expert team will complete and file your tax return accurately to HMRC and will calculate your tax liability or refund for you – sit back and let us do the hard work!

To get in contact with our Personal Tax team, please complete the short form on our website, or call 01707 671648.