No Self Assessment late filing penalty as long as you file online by 28 February 2021

HMRC have announced that taxpayers who cannot file their tax return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February 2021.

However, HMRC remind taxpayers that they are still obliged to pay their tax bill by the 31 January 2021 deadline and that interest will be charged on any outstanding liabilities. Further, the extension does not apply to time limits for claims which may normally be effected in the 2019/20 tax return, so care is needed where this is relevant to clients.  

For those who cannot afford to pay their tax bill on time, they can apply online to spread their tax bill of up to £30,000 over a period up to 12 months.  This includes any deferred payments on account from 31 July 2020, if not paid at the time. Interest will be charged on outstanding balances. The 2019/20 tax return has to be filed before setting up a time to pay arrangement.

To be able to apply online taxpayers must also not have any other payment plans or debts with HMRC, tax returns must be up to date and it is less than 60 days after the payment deadline.

HMRC advise that taxpayers who are not eligible for a payment plan, or who need longer than 12 months to pay their bill cannot use the online service and should instead call HMRC 0300 200 3822 to discuss their options.

Taxpayers who need to claim a contributory benefit soon after 31 January 2021 need to ensure Class 2 National Insurance Contributions (NICs) are paid to ensure their claims are unaffected.  Class 2 NICs may be affected if a taxpayer:

  • could not pay all of the 2019/20 Self Assessment liability by 31 January 2021
  • has entered into a Time to Pay arrangement to pay off those liabilities

As Class 2 NICs are included in the 2019/20 balancing payment some taxpayers may not have paid the necessary Class 2 NICs by 31 January 2021. Affected taxpayers should contact HMRC on 0300 200 3822 for help as soon as possible.

And for those who like tax trivia…

On 18 January 2021 HMRC shared some little-known facts about Self Assessment ahead of the 31 January 2021 filing deadline.

Apparently, 96,519 tax returns were filed on the 6 April 2020.

Those with good memories may well remember the days before HMRC introduced online tax returns. It was 20 years ago when the service began on 3 July 2000 and 38,000 online returns were filed by 31 January 2001. This year HMRC estimate that around 11 million will be filed.

In January 2011, 3.4 million taxpayers completed a tax return online. HMRC estimate that 5 million will be filed this January.

The deadline this year is on a Sunday and the last time that happened was back in 2016.

Last year the busiest day for filing returns was 31 January with 702,171 returns completed with the busiest hour for filing was between 16:00 to 16:59 when 56,969 returns were filed.

HMRC say they expect more than 12.1 million people to complete a Self Assessment tax return. Figures released earlier this month revealed that 55% of people had already filed, with more than 6.2 million submitted online.

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