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HMRC temporarily waive Self Assessment tax payers late filing and payment penalties

Late filing and late payment penalties are to be waived for one month for Self Assessment taxpayers.

On 6 January HMRC announced that they will not charge:

1. Late filing penalties for those who file online by 28‌‌ ‌February 2022
2. Late payment penalties for those who pay the tax due in full or set up a payment plan by 1‌‌ ‌April 2022

This will give taxpayers and their accountants additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging taxpayers to file and pay on time if they can — almost 6.5 million have already done so.

HMRC’s Time to Pay options are still available to assist customers. Once they have filed their 2020-21 tax return, taxpayers can set up an online payment plan to spread Self Assessment bills of up to £30,000, over and up to 12 monthly instalments.

The payment deadline for Self Assessment is 31‌‌ ‌January and interest will be charged from 1‌‌ ‌February on any amounts outstanding. Normally a 5% late payment penalty is charged on any unpaid tax that is still outstanding on 3‌‌ ‌March. This year, like last year, HMRC is giving taxpayers more time to pay or set up a payment plan. Self Assessment taxpayers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by midnight on 1‌‌ April. They can pay their tax bill or set up a monthly payment plan online at GOV.‌‌UK.

There is no change to the filing or payment deadline and other obligations are not affected. This means that:

  • interest will be charged on late payment. The late payment interest rate from 4 ‌‌ ‌January 2022 is 2.75%
  • a return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness. This means that:
    ◦ there will be an extended enquiry window
    ◦ for returns filed after 28‌‌ ‌February the other late filing penalties (daily penalties from 3 months, 6 and 12-month penalties) will operate as usual
    ◦ a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1‌‌ ‌April 2022. Further late payment penalties will be charged at the usual 6 and 12-month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.
  • HMRC will not charge late filing penalties for SA700s and SA970s received in February — these returns can only be filed on paper
  • for SA800s and SA900s HMRC will not charge a late filing penalty if taxpayers file online by the end of February — the deadline for filing SA800s and SA900s on paper was 31‌‌ ‌October. Taxpayers who file late on paper will be charged a late filing penalty in the normal way, they can appeal against this penalty if they have a reasonable excuse for filing their paper return late
  • self-employed taxpayers who need to claim certain contributory benefits soon after 31‌‌ ‌January 2022, need to ensure their annual Class 2 National Insurance contributions (NICs) are paid on time — this is to make sure their claims are unaffected. Class 2 NICs are included in the 2020 to 2021 balancing payment that is due to be paid by 31‌‌ ‌January 2022. Benefit entitlements may be affected if they:
    ◦ couldn’t pay their balancing payment by 31‌‌ ‌January 2022, and
    ◦ have entered into a Time to Pay arrangement to pay off the balancing payment and other self-assessment tax liabilities through instalments.

Read the full press release here.


If you have any questions or concerns or need assistance, please get in touch with our team:
[email protected] | 01481 244059.