If you’re a self-assessment taxpayer, you now have until 1 April to pay your bill or set up a payment plan.

HMRC has announced self-assessment taxpayers won’t be charged the usual 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021.

Help for self-assessment taxpayers

The payment deadline for self-assessment is 31 January, and interest is charged from 1 February on any unpaid tax.

Normally, you would also be subject to a 5% late payment penalty on any tax you still owe on 3 March. But this year, because of the impact of Covid-19, HMRC is giving you more time to pay or set up a payment plan.

The announcement is the latest move by the Government department to help people affected by the coronavirus pandemic. In January, it revealed it wouldn’t be issuing late filing penalties for a month to help taxpayers and agents unable to meet the 31 January deadline for submitting their self-assessment tax return.

Pay your tax bill or set up a plan

You should pay your bill or set up a monthly payment plan online at gov.uk by midnight on 1 April to avoid being charged a late payment penalty.

The online Time to Pay facility allows you to spread the cost of your self-assessment tax bill into monthly instalments until January 2022.

But, if you can, you should still pay what you owe in full, to stop interest building up. You can pay online, via your bank, or by post.

What is Time to Pay?

Self-serve Time to Pay allows you to set up a payment plan online to help you manage the cost of your tax bill up to £30,000.

If your self-assessment debt is more than £30,000, or you need longer to pay what you owe in full, you can’t set up a Time to Pay arrangement online. But you may still be able to set one up by calling the self-assessment payment helpline on 0300 200 3822.

Our advice

In these unprecedented times, it’s crucial you don’t ignore your tax bill.

If you think you’ll have difficulty paying what you owe on time, you should contact HMRC as soon as you can to put a payment plan in place. They are generally approachable and will try to help you, especially if you’ve been affected by the pandemic.

To speak to an expert on self-assessment tax, get in touch with our team today on 07813 434195 or stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation