We are writing to remind tax payers that any tax due under self-assessment for the year ended 5 April 2021, which remains unpaid by 1 April 2022, will incur a late payment surcharge of 5%.
Details
As part of the Government’s Covid support package HM Revenue and Customs (HMRC) postponed charging late payment penalties for tax due under Self-Assessment for one month. This gave taxpayers extra time, if they needed it, to pay any tax still due for 2020/21 without incurring a fixed 5% penalty.
The deadline to pay tax for 2020/21 remains 31 January 2022 however the penalty waiver means that anyone who could not pay their Self-Assessment tax by the 31 January deadline will not receive a late payment penalty as long as they pay their tax in full by midnight on 1 April 2022.
In addition HMRC also extended the time limit to set up a Time to Pay arrangement to 1 April 2022. Under a Time to Pay arrangement, taxpayers who owe HMRC less than £30,000 still have some time to set up a Time to Pay arrangement using HMRC’s online facility. Those who owe more will need to phone HMRC to arrange a bespoke payment plan before 1 April 2022.
Please be aware that any tax that has been paid after 31 January will automatically accrue interest, which is now currently charged at a rate of 3% per annum.
For a more details about late tax payments or Time to Pay arrangements please contact our Tax Director Jenny Marks.
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