HMRC has announced for a further year that anyone who cannot file their personal tax return by the 31st January deadline will not receive a late filing penalty, provided they file their return online by 28th February.
HMRC has been monitoring tax return submissions and it was again becoming increasingly clear, from the tax return filing rate, that some taxpayers were facing challenges completing theirs on time.
HMRC has therefore determined it will cancel late filing penalties for taxpayers who can file their tax returns online before the end of February.
It is important to note there has been no relaxation with the payment deadline and you must still pay your tax bill by 31st January 2022. Interest will be charged from 1st February 2022 on any tax owed at a rate of 2.75% pa, but there is a relaxation that no late payment penalty will apply if you pay your tax in full, or set up a Time To Pay arrangement, by 1st April.
If you wish to apply online to spread your tax bill over 12 months, you will need to file your 2020-21 tax return before setting up a Time To Pay arrangement.
If your tax liability on 31st January 2022 is no more than £30,000, you will be able to use HMRC’s self-service Time To Pay facility to set up a payment plan in order to spread liability over the following year.
If you wish to set up your own self-serve Time To Pay arrangement, you must meet the following requirements:
no outstanding tax returns
no other tax debts
no other HMRC payments set up
your Self-Assessment tax bill is between £32 and £30,000
it is no more than 60 days since the tax was due for payment
We understand the tax return must be submitted online at least 48 hours before an attempt to put in place a payment plan to allow HMRC to update its systems.
You will need to put in place these online payment arrangements yourself as your accountant is unable to do this on your behalf.
If you do not meet these requirements, you may still qualify for Time To Pay, but you will need to call HMRC to set this up.
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January 9, 2022
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