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Self Assessment tax return 2022: late filing and late payment penalties waived for one month

27th January, 2022

As the 31 January tax return deadline looms, Nottingham chartered accountants Clayton & Brewill explains the latest news from HMRC regarding late filing and late payment penalties being waived and highlights why it’s more important than ever to ensure your submission is made on time.

Who must send a tax return?

You must send a tax return if, in the last tax year (6 April to 5 April), you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on) and/or if you were a partner in a business partnership.

You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:

  • Some COVID-19 grant or support payments
  • Money from renting out a property
  • Tips and commission
  • Income from savings, investments and dividends
  • Foreign income

Deadlines and penalties

Self Assessment deadlinesThe deadline for paying your tax bill is typically 31 January for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account. The 31 July is then usually the deadline for your second payment on account.

Under normal circumstances, you receive a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill. There is a late filing penalty of £100 if the tax return is up to 3 months late; this increases the later it gets. You’ll also be charged interest on late payments.

Late filing and late payment penalties waived for one month

However, in a bid to help ease COVID-19 pressures, HMRC has decided it is waiving late filing and late payment penalties for Self Assessment taxpayers for one month – giving them extra time, if they need it, to complete their 2020 to 2021 tax return and pay any tax due.

This means that those making a late submission will not get a late filing penalty as long as they submit their online return by 28 February 2022.

The deadline to file and pay remains 31 January 2022. But the penalty waivers will mean that:

  1. 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
  2. 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

It’s worth noting that interest will be payable from 1 February, as usual, so it is still better to pay on time if possible. Find out more here.

Importance of paying on time

The deadline in law is still 31 January. If you submit your 2020/21 tax return online by 28 February 2022, HMRC will automatically assume that you have a reasonable excuse for being late with it. Although HMRC will not charge you a late submission penalty, your return will still legally be late. As such, we recommend you try to meet the 31 January deadline if you can.

Filing your tax return can be a stressful experience, and that’s why we are here to help. The Clayton & Brewill team can help you to prepare and file your tax return quickly and efficiently. We might even be able to reduce your tax bill.

To arrange a confidential conversation about your personal tax needs, please contact us on 0115 950 3044 or send an enquiry here.

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