At this time of year, we usually get some panicked phone calls from business owners and taxpayers who realise that the self-assessment tax return deadline has now passed, and they haven’t filed their personal tax returns by the 31st January deadline.
We know that life happens, and tax returns aren’t always at the top of your to do list – and that has never been more true than this year. The Pandemic has put more pressure on individuals and businesses, so HMRC have announced a few concessions to help support taxpayers.
Extension of the filing deadline in 2021
A week before the 31st January deadline and after some industry pressure, HMRC announced that it would effectively extend the filing deadline for self-assessment tax returns covering the 2019/20 tax year until 28th February 2021.
Whilst this is great news for taxpayers who missed the January deadline, it is worth pointing out that the tax bill still needed to be paid on time i.e. by 31st January 2021. And of course, the best way to find out how much tax you owe is by doing your tax return.
So, whilst you have been given more breathing space to file your self-assessment tax return; if you haven’t paid your tax bill yet, you are likely to be charged interest.
A recap of late filing and payment penalties
The following penalties are going to be applied if you haven’t submitted your tax return and/or paid your tax:
| Late filing | Late payment | Penalty |
| Miss filing deadline | £100 | |
| 30 days late | 5% of tax due | |
| 3 months late | Daily penalty £10 per day for up to 90 days (max £900) | |
| 6 months late | 5% of tax due or £300, if greater* | |
| 6 months late | 5% of tax outstanding at that date | |
| 12 months late | 5% or £300 if greater*, unless the taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due. | |
| 12 months late | 5% of tax outstanding at that date | |
| 12 months & taxpayer deliberately withholds information | Based on behaviour:
· deliberate and concealed withholding 100% of tax due, or £300 if greater. · deliberate but not concealed 70% of tax due, or £300 if greater. Reductions apply for prompted and unprompted disclosures and telling, giving and helping. |
Reasonable excuses for late filing
HMRC have also confirmed that they would accept coronavirus-related ‘reasonable excuses’ for appealing against late filing penalties. This is in addition to a range of other reasonable excuses already in place, such as death of a close relative or partner, serious or life-threatening illness, unexpected hospital stays and technical problems.
If you cannot pay your tax bill
The government previously announced a payment plan called Time to Pay, enabling taxpayers to pay their tax bill over 12 months. You can find out more about your options if you cannot pay your tax bill here.
In summary
Don’t panic if you haven’t done your self-assessment tax return for the 2019/20 tax year. You have until the end of February 2021 to file this. If you haven’t paid your tax bill yet, do expect to be charged interest. From March 2021, late filing penalties are going to be applied.
If we can be of any assistance, please give us a call on 01444 458252 or email us: info@prbmp.com