Extension of 5% late payment penalty deadline for Self-Assesment tax payers

19 February 2021

HMRC has issued a press release which confirms that, where Self-Assessment tax payers set up a payment plan or pay their tax by 1 April 2021, they will not be charged the 5% late payment penalty.

The payment deadline for Self-Assessment was 31 January 2021, and interest is applicable to any amounts that were outstanding from 1 February 2021. Ordinarily, where there is still an underpayment of tax on 3 March, a 5% late payment penalty is also charged on the amount. However, due to the impacts of coronavirus, taxpayers will now have until midnight on 1 April 2021 to pay their tax bill or to set up a monthly payment plan prior to being charged with that penalty.

The Time to Pay facility, which is available online, allows those required to pay a Self-Assessment tax bill to divide the cost of that bill into monthly instalments, up until January 2022.

The press release notes that over 97,260 tax payers have opted to set up a self-serve Time to Pay arrangement online, and this equates to a value of more than £367 million.

Those that can pay their bill in full, should, where possible, as this will prevent interest from accruing.

Any Self-Assessment taxpayers who need to make Payments on Account but know that their tax bill for 2021-21 is going to be lower than in the preceding tax year (2019-20) can reduce their Payments on Account. This could be highly likely due to the effects that coronavirus has had. More information relating to Payments on Account and how to reduce them is available at GOV.UK.

Those individuals who are required to file their 2019-2020 tax return should ensure that they do so by 28 February 2021 to avoid being charged a £100 late filing penalty.

A handy Self-Assessment timeline has been made available:

  • 31 January – Self Assessment deadline (paying and filing)
  • 1 February – Interest accrues on any outstanding tax bills
  • 28 February – Last date to file any late 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 more information relating to the payment of Self-Assessment tax bills online.

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