HMRC extends the filing deadline to support the self-employed.
Many self-employed will welcome the extra breathing space offered by HMRC after it extends the tax filing deadline for self-assessment to 28 February.
HMRC are also postponing late-payment penalties for self-assessment taxpayers until 1 April because of the impact Covid-19 continues to have on individuals.
Filing your tax return
The estimated 5.2 million people who have still not filed their 2020-21 tax returns will be delighted to be given the extra time to file. Around 7 million people have already submitted their returns.
The official deadline for submitting your tax return (and avoiding a late filing penalty) is 31 January; after that, a £100 late-filing penalty is automatically issued.
Now let’s be clear.
HMRC still advises that the deadline to submit a return and pay any tax liability is 31 January.
However, they won’t issue late-filing penalties for one month to give more time to taxpayers who may be experiencing difficulties.
Provided your return is submitted by 28 February, you will not receive a late filing penalty.
Paying any tax due
In addition, anyone who cannot pay their self-assessment tax before 31 January will not face a late-payment penalty.
Provided they either pay in full or set up a “time to pay” arrangement, allowing taxpayers to spread their payments before 1 April.
The late-payment penalty (usually 5%) is charged on any unpaid tax still outstanding on 3 March. However, interest would still be payable from 1 February.
The Tax App view
Whilst this extension will come as a welcomed relief to those facing tax bills this month and other usual household debts in January – which is usually a quiet month for many.
The last thing you want is that brown envelope in February that you tear open to reveal a penalty.
If you can – it’s still better to submit your tax return and pay any tax due on time.
The Tax App makes submitting your tax return very straightforward and inexpensive and can be completed in under 15-minutes.