HMRC gives leniency on Self Assessment late payment

The payment deadline for Self Assessment is 31 January and interest is charged from 1 February on any amounts outstanding.

Normally, a 5 per cent late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, HMRC revealed that because of the impact of the COVID-19 pandemic, it is giving taxpayers until 1 April to pay or set up a payment plan.

Taxpayers can pay their tax bill or set up a monthly payment plan online on the GOV.UK website.

The online Time to Pay facility allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

HMRC said it recognises the pressure affecting taxpayers due to the pandemic, and encourages anyone worried about paying their tax and unable to set up a payment plan online to contact HMRC for help and support on 0300 200 3822.

Taxpayers can pay their Self Assessment tax bill online, via their bank, or by post, and should still pay in full if they can to stop interest accruing, HMRC said.

Self Assessment taxpayers who are required to make Payments on Account and know their 2020 to 2021 tax bill is going to be lower than in 2019 to 2020 – for example, due to loss of earnings because of COVID-19 – can reduce their Payments on Account.

Further, HMRC warned Self Assessment taxpayers who have yet to file their 2019-20 tax return to file by 28 February to prevent being charged a late filing penalty of £100.

More than 97,260 customers have set up a self-serve Time to Pay arrangement online, totalling more than £367 million.

“Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at GOV.UK to help anyone struggling to meet their obligations,” said HMRC chief executive Jim Harra.