1.1 million taxpayers who had still not filed their 2019/20 tax return in early March have already incurred a £100 fine. Action is needed before 1 April to avoid a 5% late-payment penalty.
HMRC statistics indicate that approximately 1.1m taxpayers had still to file their self assessment tax return on 2 March 2021.
In addition to incurring a £100 late-filing penalty, which had been waived by HMRC until the end of February in acknowledgement of the coronavirus pandemic, the deadline for the 5% late-payment penalty is now approaching.
Taxpayers should now file their 2019/20 return by the end of March and either pay their tax or arrange for time to pay (TTP), to avoid a late-payment penalty which applies this year on 1 April.
Normally, late-payment penalties of 5% of tax due are applied 30 days after the filing date. In February, HMRC announced that for 2019/20 returns taxpayers that either pay the tax owed or set up a TTP arrangement by 1 April won’t be charged late payment penalties.
If taxpayers still haven’t filed online by 30 April, however, then they will start to incur further late-filing penalties at the rate of £10 per day.
Online time-to-pay portal
HMRC has an online TTP portal to allow taxpayers who owe £30,000 or less to set up an automatic TTP arrangement to clear the debt by January 2022. This enables taxpayers to speed up the process as they don’t need to contact HMRC to set up this plan.
Taxpayers can set up an online payment plan to spread the cost of their latest self assessment bill if:
- they owe £30,000 or less;
- they do not have any other payment plans or debts with HMRC;
- their tax returns are up to date; and
- it is less than 60 days after the payment deadline.
This online portal remains open until 1 April 2021.
Appeal for late filing
Taxpayers who missed the 28 February 2021 deadline facing a £100 late filing penalty can still appeal if they believe they have a reasonable excuse for late filing. Taxpayers must file a return before they can appeal the penalty and make their case.
Missed SEISS grants
As confirmed in the Budget, taxpayers who failed to file their 2019/20 tax return by 2 March 2021 will not be eligible to claim the fourth or fifth grants under the Self-employed Income Support Scheme.
More support on tax
ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.Sign up for TAXwireJoin the Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.