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Taxpayers must pay tax this weekend or risk interest

Author: ICAEW

Published: 29 Jan 2021

Taxpayers must pay their self assessment tax this weekend or risk paying interest, while failure to fail a return could result in possible exclusion from the next round of SEISS, chartered accountancy body ICAEW has warned.
  • Waiver of filing penalty not an extension to the filing deadline
  • Interest on outstanding payments will start to accrue from February
  • Taxpayers who delay filing could miss out on future government support from SEISS

The warning comes amid confusion from some taxpayers about the deadline for filing, following changes to late filing penalties announced by HMRC.

Earlier this week HMRC confirmed it would not penalise anyone who filed their 2019/20 return online by February 28, as it would assume that all taxpayers have a reasonable excuse for late filing. But this did not change the formal self assessment deadline and there may be other unexpected consequences if returns are not filed by Sunday, January 31, ICAEW said.

ICAEW added that the deadline for paying tax also remains Sunday, January 31. Interest at 2.6% will start to accrue from Monday, February 1 for self assessment tax liabilities that were due on January 31. 

Taxpayers should therefore consider paying an estimated amount to minimise interest charges, ICAEW said. While HMRC is offering enhanced arrangements for those who cannot afford to pay, a tax return must be filed before this can be set up.

ICAEW said that by filing after the Sunday deadline, taxpayers could risk being ineligible for the fourth version of the self-employment income support grant if a decision is made to include information from 2019/20 tax returns, but only those filed by January 31. But the chartered accountancy body stressed that no decision had been made and an announcement about eligibility was expected in the Budget.

Caroline Miskin, ICAEW Technical Manager, said:

“The clock is ticking down to the Sunday deadline and anyone who would normally file a self-assessment should submit it this weekend, using provisional figures if necessary.

“The late filing penalty has been waived for returns filed until the end of February but it is important taxpayers understand this does not change the formal deadline for filing, which remains Sunday January 31. 

“Any outstanding tax will accrue interest from Monday so if you are not sure how much you owe paying an estimated amount could save you money.

“If you do not submit your tax return this weekend you could even miss out on future income support schemes, so it is important you do not miss the deadline.”

ICAEW added that the online time to pay system would remain open for 60 days following 31 January, but a 5% late payment penalty would be charged on any 2019/20 tax which was not paid, or in a time to pay arrangement, on or before 2 March 2021.

It added that the automatic waiver of late filing penalties does not generally apply to paper returns, which were usually due to be filed by 31 October 2020 but that taxpayers who have reasonable excuse for late filing can appeal.

Notes to editors
  1. ICAEW has spokespeople available for interview
  2. For more information, ICAEW’s Tax Faculty has answered questions relating to this issue.
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