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HMRC WAIVES PENALTIES FOR LATE FILINGS

Last updated: 07 Jan 2022 02:20 Posted in: AIA

For the second year running late filing and late payment penalties will be waived for Self Assessment taxpayers for one month after the normal deadline of 31 January.

HM Revenue and Customs (HMRC) made the announcement in order to allow taxpayers extra time, if they need it, to complete their 2020 to 2021 tax return in response to the ongoing covid pandemic which has increased pressure on individuals and tax advisers to complete online submissions.

Commenting on the announcement, Rachel Rutherford, AIA Policy & Public Affairs Director said, “AIA welcome the timely intervention which will help to alleviate pressure on Self Assessment taxpayers and their agents during this period when capacity is at bursting point due to the ongoing impact of Covid-19.

“The penalty waivers give taxpayers who need it more time to complete their obligations and file their return online and pay the tax due without worrying about receiving a penalty.”

HMRC continues to encourage taxpayers to file and pay on time if they can, as the department reveals that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.

The deadline to file and pay remains 31 January 2022, but penalty waivers will mean that anyone who cannot file their return by the 31 January deadline 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 31 January 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.

Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible.

Lucy Frazer, Financial Secretary to the Treasury, said “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs.

“Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.”

Self Assessment Timeline

31 January – Self Assessment deadline (filing and payment)

1 February – interest accrues on any outstanding tax bills

28 February – last date to file any late online tax returns to avoid a late filing penalty

1 April – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment penalty

1 April – last date to set up a self-serve Time to Pay arrangement online

There is no change to the filing or payment deadline and other obligations are not affected. This means that:

interest will be charged on late payment. The late payment 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 lateness.

Further Advice

If you require further advice on tax related matters go to the AIA Tax Insights Page.

“AIA welcome the timely intervention which will help to alleviate pressure on Self Assessment taxpayers and their agents during this period when capacity is at bursting point due to the ongoing impact of Covid-19.

“The penalty waivers give taxpayers who need it more time to complete their obligations and file their return online and pay the tax due without worrying about receiving a penalty.”