25 Jan 2022

HMRC extends penalty-free Self-Assessment deadline

HM Revenue and Customs (HMRC) have announced a repeat of the concession made last year to assist those who have not yet filed their self-assessment tax returns. For more information click here.

While HMRC have confirmed that those who submit their tax returns electronically by 28 February will not receive a late filing penalty, there are other charges individuals may still be subject to. For anyone who cannot submit their return by 31st January, ensure you have taken all possibilities into account before waiting to file.

Despite the extension HMRC have granted on the self-assessment tax return for 2021/2022, we are advising clients to stick to the usual January 31st deadline where possible to avoid accrued interest and the potential of extended enquiry periods.

After the 31st of January your account begins to accrue interest on the outstanding tax bill. For more information on how to pay, click here. While you may not be subjected to the £100 late filing penalty, any late paid amounts will attract daily interest at 2.75% (annum rate).

Also important to remember that the 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers will need to declare if they received any taxable grants or payments from the COVID-19 support schemes up to 5 April 2021 on their return including:

  • Self-Employment Income Support Scheme (SEISS)
  • Coronavirus Job Retention Scheme (CJRS, or furlough)
  • Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

Broadly, if a tax return is filed on or before 31st of January, the HMRC enquiry window will only run for a year from submission. However, if filed after the 31st January, the enquiry window won’t close for up to 15 months. An extra element of stress for individuals!

Of course, due to the coronavirus pandemic, it will not be possible for everyone to submit by the 31st. If you cannot pay the tax by the 31st of January, you have up to April 1st to pay in full (inclusive of interest) or to set up a ‘time to pay’ scheme to avoid the 5% additional late payment penalty.

Where possible, we advise everyone to file by the 31st of January to be in a favourable position. If this isn’t possible, seek guidance from a professional who can help you find the best path to take.

Jessica Hunt