The government has confirmed that Self Assessment (SA) taxpayers will not be charged the normal 5% late payment penalty if pay their tax or set up a payment plan by 1 April 2021.

The SA payment deadline is 31 January and interest is charged from 1 February on any amounts outstanding. Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. However, this year, due to the impact of the Covid-19 pandemic, HMRC are allowing additional time to pay or set up a payment plan.

If you are unable to pay your tax, you may be eligible to enter into a Time To Pay arrangement with HMRC. In this case, penalties can be suspended and potentially canceled if the arrangement is adhered to. We can advise you further on this.

Due to the COVID pandemic, the UK Government support has now been extended to Self Assessment payments due for payment by 31 January 2021. If you have been unable to pay your Self Assessment bill in full by 31 January 2021 you can now set up an online ‘Time to Pay Arrangement’ of up to 12 months, where the debt is less than £30,000.  The payment plan will let you pay the tax due by installments and is automatic and immediate. It can be set up through GOV.UK using your Government Gateway ID.

For Self Assessment debts above £30,000 or where you need a longer period to pay, you will need to contact HMRC on the Self Assessment payment helpline (0300 200 3822).  By setting up a payment plan, you will avoid any penalties although you will still have to pay interest on any payments that are deferred. If you have any queries in relation to this please contact us here.

Do you need help with your tax return?

In exceptional circumstances, if you have a reasonable excuse as to why your tax return has been filed late, you may be able to appeal against penalty charges. Ellacotts can appeal against these charges on your behalf and we have recently been able to save our clients £1,600 by submitting successful appeal letters in HMRC on behalf of our clients.

If you are facing a fine or need help paying your tax or doing your tax return, please contact us by email or on 01295 250401.