TT358: Waiving late filing and late payment penalties for Self-Assessment taxpayers

January 10, 2022

HM Revenue and Customs (“HMRC”) have recently issued a press release confirming that they will be waiving late filing and late payment penalties for Self-Assessment taxpayers for one month in respect of the tax year ended 5 April 2021.

These penalty waivers mean that anyone filing their tax return no later than 28 February 2022 or paying their tax (or entering into a time to pay arrangement) by 1 April 2022 will not be charged any penalties.

However, it is important to note that the filing and payment deadlines actually remain the same. Therefore, late interest (at 2.75%) will be chargeable on payments made after 31 January 2022, a 5% late payment penalty will be charged on amounts outstanding not paid by 1 April 2022 and importantly, HMRC’s tax enquiry window is extended by up to 3 months if your tax return is filed after 31 January 2022.

Whilst HMRC do not detail how they chose the taxpayers to whom they issue enquiries, it is commonly understood that filing your return late increases the risk of such an enquiry. Therefore, whilst we applaud HMRC’s understanding of the difficulties which the current pandemic places on taxpayers, we would strongly urge our clients to ensure their tax returns are filed by 31 January 2022 even if they wish to take advantage of the month-long penalty waiver for payment of the tax.

If you are concerned about being able to pay your tax by 1 April 2022 we would strongly advise you to contact your Barnes Roffe partner as soon as possible to discuss your options.

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