HMRC Self Assessment deadline extension

HMRC Self Assessment deadline extension

Last Thursday, HMRC announced a one-month waiver for Self Assessment taxpayers to file their tax returns for 2020/21.

Pressures from COVID-19 has meant that some taxpayers cannot meet their obligations by the end of the January deadline.

Self Assessment tax returns are typically due by the 31st of January. However, HMRC revealed that out of the 12.2 million Self-Assessment taxpayers in the UK, only around 6.5 million had returned their assessments (06/01/2022).

What does the waiver mean?

The penalty waiver allows more time to complete the online return without receiving a late filing penalty —providing that the completed  Self Assessment is returned by the 28th of February.

Additionally, those who cannot pay their Self Assessment tax by the 31st of January deadline will not receive a late payment penalty if they pay their tax in full or set up a Time to Pay arrangement by the 1st of April 2022.

The Time to Pay service allows individuals or businesses to spread their tax payments over time. Self Assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.

How does this affect you?

The 2020/21 tax return should cover all earnings and payments made during the pandemic, except for the one-off £500 payment for working households receiving tax credits.

Taxpayers will need to declare if they received any grants or payments from the COVID-19 support schemes up to the 5th of April. These include:

  • Self-Employment Income Support Scheme
  • Coronavirus Job Retention Scheme
  • Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

HMRC encourages those applicable to file their tax returns on time if they can, as, from the 1st of February, an interest rate of 2.75% is chargeable.

If you need more information or advice about how the waiver affects your business, get in touch today.