HMRC has extended the deadline for you to file and pay your self-assessment tax return by one month – for the second year running.

The news means you won’t receive a late filing penalty if you file your 2020/21 self-assessment tax return online by 28‌‌ ‌February 2022. Plus, you won’t face a late payment fine if you pay your tax in full or set up a payment plan by 1‌‌ ‌April 2022.

But the deadline to file and pay remains 31 January 2022 and you’ll still be liable for interest from 1 February, so it’s better to pay on time, if you can.

Easing the pressure of Covid-19

HMRC has announced the penalty waivers to ease the “pressure” faced this year by self-assessment taxpayers and their agents.

Meanwhile, the department has revealed that of the 12.2 million taxpayers who need to send their tax return by the end of this month, around 5.7 million have still not done so.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We know the pressures individuals and businesses are again facing this year, due to the impacts of Covid-19. Our decision to waive penalties for one month for self-assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.”

Do you need to set up a Time to Pay arrangement?

The existing Time to Pay (TTP) service gives you or your business the option to spread tax payments over time. You can set up TTP online after you’ve filed your return if you’re a self-assessment taxpayer with up to £30,000 of tax debt.

Your 2020/21 tax return covers earnings and payments during the pandemic. You’ll need to declare if you received any grants or payments from the Covid-19 support schemes up to 5 April 2021, including:

  • Self-Employment Income Support Scheme (SEISS)
  • Coronavirus Job Retention Scheme (CJRS)
  • 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

But you shouldn’t report the £500 one-off payment for working households receiving tax credits in your self-assessment.

Our thoughts on HMRC’s penalty waivers

HMRC’s lenient approach to the late submission of 2020/21 tax returns will come as a relief if you’re suffering from the knock-on effects of the recent rise in Covid-19 cases.

But although there’s no penalty for late submission, it’s still important for you to meet the deadline if you can.

And remember, HMRC has 12 months to investigate your tax return after you submit it. So, while late filing won’t result in a penalty if you send your return in February, it will extend the enquiry window because it’s still technically a late filing.

Plain-English tax advice

For clear, professional advice on a range of tax matters – including self-assessment tax returns – call the Churchill Taxation team on 07813 434195 or email:

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation