HMRC delays self-assessment filing date but tax still due on 31 January

Published by Daniel Grainge on 26 January 2021

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HMRC yesterday (25 January) announced that self-assessment tax returns filed after the 31 January and before 28 February will not be penalised with a late filing penalty of £100.

But HMRC still expects taxes to be paid by 31 January. Late payments will attract interest that could easily exceed the £100 late filing penalty.

Daniel Grainge, Partner and Head of Tax comments: “Yesterday’s announcement by HMRC is welcome but will continue to present considerable challenges for taxpayers. If a tax return has not yet been completed it is unlikely that the exact amount of tax due will be known, yet HMRC still requires tax due to be paid by 31 January.

“Individuals in this position should look to make a payment on account to HMRC estimating the amount of tax they or their advisers believe due. If an overpayment is made it can be reclaimed. If an underpayment is made, the interest charges will be significantly less than if no payment had been made at all.

“For those who really cant make payment, HMRC will consider a time to pay arrangement.  This must be agreed before 28th February otherwise a 5% surcharge will kick in. Interest will still be chargeable.”

“Questions will undoubtedly be asked as to why the payment date could not also be pushed back to 28 February. Government budgeting focuses around the 31 January tax receipts and at a time when spending is at an all-time high, changing that window is likely to have caused considerable challenges.”

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