14th January 2022

Due to the ongoing issues relating to the coronavirus pandemic and its impact, HMRC has announced that it will waive late filing and late payment penalties (but not interest) on 20/21 Self Assessment tax returns and payments for one month. Those who can file and pay by the statutory deadline of 31 January 2022 are still encouraged to do so.

Some key points

  • If you cannot file your 20/21 return by the 31st of January 2022 deadline, you will not receive a late filing penalty if you file online by 28th of February 2022.

  • If you cannot pay your Self Assessment tax by the 31st of January 2022 deadline, you will not receive a late payment penalty if you pay your tax in full, or set up a Time to Pay arrangement (Self Assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return), by 1st of April 2022.

  • From 1st of February 2022, a late payment interest rate of 2.75% will be applicable on any outstanding tax bills.

  • The 20/21 tax return should include any grants or payments received from Covid-19 support schemes (including Self-Employment Income Support Scheme, Coronavirus Job Retention Scheme, self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme) up to the 5th of April 2021. However, the £500 one-off payment for working households in receipt of tax credits does not need to be reported.

  • It should be noted that the collection of Class 2 National Insurance Contributions (NICs) can be impacted by filing returns and/or making payments after the January deadline. Voluntary Class 2 NICs will need to be paid separately if the liability is not recorded on HMRC’s system and/or payment not made by 31 January. To ensure their entitlement is not put at risk, self-employed taxpayers who need to claim certain contributory benefits soon after the January deadline will need to pay their annual Class 2 NICs by 31 January 2022.

If you would like more information about this, please do not hesitate to get in touch:

James Bell
E:
jamesbell@unw.co.uk
T: 0191 243 6091

Louise Main
E:
louisemain@unw.co.uk
T: 0191 243 6083

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