HMRC suspends tax return late filing penalties until the end of February

HMRC has been monitoring tax return submissions and it was again becoming increasingly clear, from the tax return filing rate, that some taxpayers were facing challenges completing theirs on time. 

HMRC has therefore determined it will cancel late filing penalties for taxpayers who can file their tax return online before the end of February. 

It is important to note there has been no relaxation with the payment deadline and you must still pay your tax bill by 31st January 2022. Interest will be charged from 1st February 2022 on any tax owed at a rate of 2.75% pa, but there is a relaxation that no late payment penalty will apply if you pay your tax in full, or set up a Time To Pay arrangement, by 1st April. 

If you wish to apply online to spread your tax bill over 12 months, you will need to file your 2020-21 tax return before setting up a Time To Pay arrangement. 

If your tax liability at 31st January 2022 is no more than £30,000, you will be able to use HMRC’s self-service Time To Pay facility to set up a payment plan in order to spread  liability over the following year. 

If you wish to set up your own self-serve Time To Pay arrangement, you must meet the following requirements:  

• no outstanding tax returns  
• no other tax debts  
• no other HMRC payments set up  
• your Self-Assessment tax bill is between £32 and £30,000  
• it is no more than 60 days since the tax was due for payment   

We understand the tax return must be submitted online at least 48 hours before an attempt to put in place a payment plan to allow HMRC to update its systems.  

You will need to put in place these online payment arrangements yourself as your accountant is unable to do this on your behalf.  

If you do not meet these requirements, you may still qualify for Time To Pay, but you will need to call HMRC to set this up.  

Need more help?

We love working with self-employed professionals and independent business owners and if you are not receiving the service and support you deserve from your accountant then please talk to TaxAssist Accountants on 0131 445 3330 or use our online enquiry form.

We offer free initial consultations, advice and support over the phone or via video meeting if you have any concerns about face-to-face meetings.

Date published 25 Jan 2021 | Last updated 18 Feb 2022