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In a surprising last-minute move, HMRC have today announced that Self Assessment penalties will not be levied on taxpayers who miss the 31 January 2021 filing deadline, provided their return is submitted by 28 February 2021. While this will be welcome news for many, HMRC do reiterate that the tax is still due by 31 January, meaning anyone who does not pay their tax bill until submission may face interest charged on tax paid late.

HMRC’s Chief Exec Jim Harra said that HMRC recognised the “immense pressure” people were under during these “unprecedented times” and that they “assume most of these people will have a valid reason for filing late, caused by the pandemic.”

HMRC are also urging taxpayers who think they may have trouble paying their outstanding tax liability to submit as soon as possible, as they cannot enter a time to pay (TTP) arrangement until the return is filed. Affected taxpayers can apply for self-serve Time to Pay via GOV.UK, where they can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments. Interest will be applied to any outstanding balance from 1 February 2021.


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Note that HMRC have not changed the deadline, merely delayed penalties for a month, and HMRC’s announcement does not refer to any waiver of the 5% surcharge on tax that remains unpaid by 28 February. This could be important if looking to put a TTP arrangement in place after submission of the return.

While this will be welcome news for many taxpayers (and their advisers) who have been struggling in the run up to the deadline, we would still recommend submitting tax returns as soon as possible.

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