You may have already heard that HM Revenue and Customs (HMRC) is waiving late filing and late payment penalties for Self Assessment taxpayers until 28 February 2022. But what does this mean for you?

The most important thing to bear in mind is that this is not a Self Assessment deadline extension. The deadline for filing remains 31 January 2022, which means your tax return will be considered late if you file after the date. You will also accrue interest at 2.75% from 1 February 2022 – so it’s best to file and pay on time if you can.

Important dates

  • 31 January – Self Assessment deadline (filing and payment)
  • 1 February – 2.75% interest starts accruing on outstanding tax bills
  • 28 February – last date to file online tax returns to avoid a late filing penalty
  • 1 April – last date to pay outstanding tax or make a Time to Pay arrangement to avoid a late payment penalty
  • 1 April – last date to set up a self-serve Time to Pay arrangement online

What are the penalties?

In a normal year, delaying your tax return and payment incurs in:

  • A late filing penalty of £100 for returns up to 3 months late
  • A late payment penalty of 5%, calculated on tax due
  • Further charges apply if more than 3 months late

Due to the COVID-19 pandemic, HMRC is waiving the late filing penalty and giving taxpayers more time to file, until 28 February 2022. You will still incur penalties if you miss the extended deadlines listed above.

What do I have to do?

The waiver means that you won’t be penalised as long as you:

  1. File your tax return before 28 February 2022
  2. Pay your tax in full or make a Time to Pay arrangement by 1 April 2022

However, late payment interest at 2.75% will still accrue from 1 February 2022. This means you will incur additional costs if you file late, despite the penalty being waived.

Do I need to file a Self Assessment?

You must file a Self Assessment if any of the following applied to you in the past tax year (6 April to 5 April):

  • A sole trader with earnings over £1,000 before tax relief
  • A partner in a business partnership
  • A company director 

You may also have to file if you earn money from:

  • Renting out a property
  • Tips and commission
  • Savings, investments and dividends
  • Another country

If you’re not sure, check with HMRC.

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