Four million customers have yet to submit their self-assessment tax returns and pay any tax due by the January 31 deadline, HM Revenue and Customs (HMRC) has warned.
More than 12.2 million customers are expected to file a tax return for the 2020 to 2021 tax year.
HMRC urges the millions of customers who have yet to file their tax return, to pay outstanding debts or set up a payment plan, to do so before the deadline, as interest will be charged on all outstanding balances from from February 1.
However, earlier this month, HMRC announced they would waive penalties for one month for late filing of tax returns and late payments. The changes mean:
- anyone who cannot file their return by the January 31 deadline will not receive a late-filing penalty if they file before February 28
- anyone who cannot pay their tax debt by the January 31 deadline will not receive a late payment penalty if they pay their tax in full, or put in place a payment delay agreement, before April 1
Myrtle Lloyd, HMRCThe Managing Director of Client Services, said:
We know some customers may struggle to meet the January 31 self-assessment deadline, so we’ve removed penalties for a month, giving them more time to meet their obligations.
And if anyone is worried about paying their tax bill, they can set up a monthly payment plan online – search ‘pay my Self Assessment’ on GOV.UK.
HMRC provides support to clients completing their tax return. Anyone who has not yet filed their claim can book a place to access live webinars, taking place throughout January on GOV.UK. Alternatively, recordings are available on GOV.UK. In addition, HMRC produced resources to help customers meet their obligations, including YouTube videos and self-assessment tips on GOV.UK.
There is no change to HMRCSelf-Assessment Helpline hours of operation. The telephone service will not open on Saturday 29th or Sunday 30th January and will operate normally until 6 p.m. on Monday 31st January.
The existing Time to Pay service allows any person or business that needs to spread their tax payments over time. Self-assessment taxpayers with up to £30,000 in tax debt can do this online once they have filed their return.
If customers owe more than £30,000 or need more time to pay, they should call the Self-Assessment Payment Helpline on 0300 200 3822.
A full list of payment methods taxpayers can use to pay their self-assessment tax bill is available on GOV.UK.
The 2020 to 2021 tax return covers income and payments during the pandemic. Taxpayers will need to report whether they received grants or payments from COVID-19 support programs through April 5, 2021 on their self-assessment, as these are taxable, including:
- Self-Employment Income Support Scheme
- Coronavirus Job Retention Program
- other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those from the Eat Out to Help Out program
The £500 one-off payment for working households receiving tax credits should not be declared in the self-assessment.
It is important for clients to check and make changes to their tax return to ensure that any SEISS payments or other COVID-19 support payments have been correctly reported in their self-assessment.
HMRC urges everyone to be vigilant if contacted out of the blue by someone asking for money or personal information. Taxpayers should always enter the full online address www.gov.uk/hmrc to get the correct link to file their self-assessment return online securely and free of charge. HMRC sees a large number of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advise not to respond directly to anything suspicious, but contact them immediately and search GOV.UK for ‘HMRC scams’.
Normally, late-filing penalties are applied to all returns due but filed after the January 31 deadline. These penalties are waived if the taxpayer has a reasonable excuse for filing late. However, this year, like last year, HMRC does not charge late-filing penalties for a month to help taxpayers and agents who are unable to meet the deadline. Late-filing penalties will not be charged for online tax returns received before February 28.
The payment deadline for the self-assessment is January 31 and interest will be charged from February 1 on all amounts due. Normally, a 5% late fee is charged on any unpaid tax that remains unpaid by March 3. This year, like last year, HMRC gives taxpayers more time to pay or set up a payment plan. Self-assessed taxpayers will not be charged the 5% late penalty if they pay their tax or set up a payment plan before midnight on April 1. They can pay their tax bill or set up a payment term agreement online at GOV.UK.
- January 31 – Self-assessment deadline (deposit and payment)
- February 1 – interest accrues on unpaid tax bills
- February 28 – deadline to file any late online tax returns to avoid a late-filing penalty
- April 1 – deadline to pay any unpaid taxes or enter into a payment delay agreement, to avoid a late payment penalty
- April 1 – deadline to set up a self-service Time to Pay agreement online
There is no change to the filing or payment deadline and other obligations are not affected. It means that:
- interest will be charged in the event of late payment. The late interest rate is 2.75%
- a return received online in February will be treated as a return received late, with a valid reasonable excuse for the delay. It means that:
- there will be an extended survey window
- for declarations filed after February 28, the other late penalties (daily packages from 3 months, 6 and 12 months) will operate normally
- a 5% late penalty will be charged if the tax remains due and no payment plan has been put in place, before midnight on April 1, 2022. Other late penalties will be charged at the usual periods of 6 and 12 months (August 2022 and February 2023 respectively) on tax due when a payment plan has not been put in place
- we will not impose penalties for late production of SA700 and SA970 received in February. These declarations can only be filed on paper
- for the SA800 and SA900, we will not impose a late-filing penalty if taxpayers file their return online before the end of February. The deadline for filing SA800s and SA900s on paper was October 31. Taxpayers who file late on paper will be charged a late filing penalty in the usual manner. They can appeal this penalty if they have a reasonable excuse for filing their paper return late.
Taxpayers who are required to make installments and know that their bill will be lower than the previous tax year, for example due to a loss of income due to COVID-19, can reduce their installments . Visit GOV.UK to find out more about account payments and how to reduce them.
Where tax credit clients are unable to report their final/actual income for the 2020 to 2021 tax year by January 31, 2022, they should report the figure as soon as possible after January 31. In most of the cases HMRC update the income used to calculate final entitlement to tax credits if the delay is due to the impact of COVID-19.
Self-employed taxpayers who are due to apply for certain contributory benefits shortly after January 31 should ensure that their annual Class 2 National Insurance (NIC) contributions are paid on time. This is to ensure that their claims are not affected. Class 2 NICs are included in the 2020 to 2021 balance payment which must be paid by January 31, 2022. Benefit entitlements may be affected if they:
- were unable to pay their compensatory balance before January 31, 2022
- have entered into a payment extension agreement to settle the balancing payment and other self-assessment tax obligations in installments
- affected taxpayers should contact HMRC on 0300 200 3822 to get help as soon as possible
Self-employed customers who have profits of less than £6,475 in the 2020 to 2021 tax year and who wish to pay Voluntary Class 2 NICs for contributory benefits after 31 January 2022 or who have paid Voluntary NICs class 2 via self-assessment by January 31, 2022 but will not file their return until after January 31 should contact HMRC on 0300 200 3500 for assistance.
Individuals and organizations can protect their online accounts and devices using the National Cyber Security Center’s Six Cyber Aware Behaviors:
- use a strong and distinct password for your email
- create strong passwords using 3 random words
- save your passwords in your browser
- enable two-factor authentication (2 FA)
- update your devices and apps
- back up your data
More information on the Cyber Aware campaign