Did you file your 2019/2020 self-assessment tax return before the 31 January deadline? Or are you one of the 1.8 million people who missed last Sunday’s deadline?

HMRC has revealed that around 1.8 million people missed the 31 January deadline, while more than 10.7 million submitted their tax return on time.

The figures follow last week’s announcement that the Government department wouldn’t be issuing late filing penalties for a month to help taxpayers and agents unable to meet the 31 January deadline.

The decision was made to ease the pressure for people affected by the coronavirus pandemic.

If your tax return is now late, you won’t be charged a late filing penalty provided you submit your return online by 28 February.

Interest still being charged

If you didn’t pay your self-assessment tax bill by the end of January, you should be aware interest is now being added to your outstanding balance.

So, you should pay your bill as soon as you can or arrange a payment plan before 3 March 2021 to avoid a 5% late payment penalty.

But if you’re not yet able to file your tax return, you should pay an estimated amount as soon as possible, to minimise any interest and late payment penalty.

Impact of Covid-19

Karl Khan, HMRC’s Interim Director General for Customer Services, said: “We won’t send anyone a late filing penalty if they complete their tax return by 28 February.

“We know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic. Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.”

Our tax return advice

It was helpful for HMRC to waive the penalties for people suffering from the impact of Covid-19. But it’s very important that you submit your tax return as soon as possible, and certainly make a payment towards the tax liability to prevent further interest building up.

Paying your tax bill

There are several ways you can pay your self-assessment tax bill or an estimated amount. You can pay online, via your bank, or by post.

If you can’t pay your bill in full, you can apply to spread the cost. You can set up a payment plan, in up to 12 monthly instalments, online via the Government’s website, if you meet the following requirements:

  • You don’t have any outstanding tax returns
  • You have no other tax debts
  • You don’t have any other HMRC payment plans set up
  • The debt is between £32 and £30,000
  • The payment plan must be set up no later than 60 days after the due date for payment

If you don’t meet these requirements or need more than 12 months to pay off your bill, you can apply for a payment plan by speaking to one of HMRC’s debt advisers.

Interest accrues on all outstanding balances, including those in payment plans.

If you’d like help with your self-assessment tax return or another tax matter, speak to our team today on 07813 434195 or stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation