Changes to Self Assessment deadlines for 2020/21
With the deadline for 2020/21 Self Assessment tax returns approaching, TaxScouts, look at the changes to this year’s deadlines in the wake of the covid-19 pandemic.
Like last year, HMRC has extended the deadlines for late filing and payment penalties. The changes were introduced this year to ease the financial burden on taxpayers and agents in the wake of the ongoing pandemic, and specifically the spread of the Omicron variant.
Here we’ll take you through all the important updates to the 2020/21 Self Assessment deadlines.
Late Filing Penalty Deadline Extended
On the 6th January 2022, HMRC announced that there will be no late filing penalties issued as long as Self Assessment tax returns are submitted before 28th February 2022.
Regular penalties will then take effect from 1st March 2022 onwards. For late filing the penalty starts at £100. Read more about how this penalty increases depending on how late you file.
Late Payment Penalty
Under normal circumstances, taxpayers would be required to both submit and pay any tax that they owe by 31st January. However, HMRC have said that no late payment penalties will be issued as long as taxpayers pay their tax bill or set-up a payment plan by 1st April 2022.
From the 2nd April 2022 onwards late payment penalties will be issued, which will start at 5% of your tax bill.
Does this mean you should delay your tax return?
While it’s good news that the penalty deadlines have been extended, we would still strongly advise anybody who needs to complete a Self Assessment and pay tax to do so by 31st January.
This is because you will still face paying interest if you file and pay your tax return after the normal 31st January 2022 deadline. Interest is charged at 2.6% Annual Percentage Rate. This works out at approximately 0.2% of your tax bill if you file by the end of February 2022.
So while it may be tempting to delay your Self Assessment, we’d recommend sticking to the normal 31st January 2022 deadline to avoid incurring any extra interest charges. Only file late if you are struggling to meet the deadline this month.
Remember, if you are struggling to pay the tax that you owe this year then you should get in touch with HMRC as soon as possible, as you may be able to set-up a payment plan to help.