In response to the extraordinary pressures created by the third national lockdown, HMRC announced today that Self Assessment taxpayers who have not filed their 2019/20 tax return by the 31 January 2021 deadline will not receive a late filing penalty if they file their return online by 28 February 2021.

HMRC’s press release states that they are still encouraging anyone who has not yet filed their tax return to do so by 31 January 2021, if possible. HMRC advise that late payment interest will be charged from 1 February 2021 on any outstanding liabilities. This means that if tax returns are submitted after the 31 January filing deadline, late payment interest will be automatically applied to the unpaid liability.

Setting up a Time to Pay arrangement

Taxpayers can spread the cost of their tax bill over up to 12 monthly instalments by setting up a Time to Pay arrangement. If any taxpayer cannot afford to pay by 31‌‌ ‌January, they may be able to set up an affordable plan with HMRC and pay in monthly instalments, so long as their 2019/20 tax return has been filed before setting up a time to pay arrangement.

Further information about the Time to Pay arrangement can be found here. 

And remember, if you have not settled your tax liability before 2 March 2021 and have not entered into a payment plan with HMRC before then, you will be charged a late payment penalty of 5% on unpaid 2019/20 tax liabilities.

How M+A Partners can help

At M+A Partners, our team will continue to work to the 31 January filing deadline to ensure all our clients have every possible opportunity to settle their tax liabilities or arrange Time to Pay agreements with HMRC at the right time. However, if you have not yet sent us your 2019/20 tax return information and had accepted that a late submission penalty of £100 would be applied by HMRC, we urge you to send us your information now so that we can help you to meet the extended deadline of 28 February 2021.