HMRC ANNOUNCES ONE-MONTH SELF-ASSESSMENT PENALTY WAIVER FOR TAXPAYERS
HMRC announces a one-month self-assessment penalty waiver for taxpayers, allowing extra time if they need it to complete their 2021 tax returns. HMRC took this action to recognise how overwhelming businesses felt, having been weighed down by the impact of Covid-19 and especially with the Omicron variant.
Such an announcement is a repeat of what HMRC did last year’s end. So, it gives taxpayers more than enough time to fill out all pertinent information on their 2021 tax returns.
HMRC has revealed that this year, there will be no penalties for late filings when you file your tax return any time before February 28 when filing online. Additionally, there are no penalties for late payments if you can pay in full or set up a payment arrangement before April 1, 2022.
It is important to note that the payment deadline and any other obligations of those who fill in their returns have not been changed. The deadline to file and pay is still January 31, 2022, so you can continue to file or pay your tax return online via HMRC’s Self-Assessment website. Interest will also still be payable from February 1, 2022.
It is advised that you submit your tax returns and pay your tax liabilities by January 31; if payment is submitted late, you will still be charged with an interest rate of 2.75%. Taxpayers can easily avoid this by submitting returns on time.
However, suppose you received any tax returns online in February. In that case, HMRC will consider it as a late submission and open an inquiry on your tax returns. Similarly, the usual filing penalties will imply filing your tax returns after February 28.
Furthermore, a late payment penalty of 5% will be charged on tax outstanding where a payment plan has not been set up by April 1, 2022. HMRC has announced that taxpayers will no longer be required to pay the penalty for misfiling their tax returns, provided their accounts are filed by January 31, 2022.
Such leverage from HMRC is excellent news for taxpayers. Now they will have extra time to file their tax returns and won’t be subject to a penalty if they do so within the due date.
The Time to Pay service allows people to file their taxes in specific periods to help spread the cost of their tax return payment. Self-Assessment taxpayers with up to £30,000 of tax debt are provided with this option once they have filed their return. Time to pay may consider factors like early payment discount, paying electronically, and records of you having paid other taxes on time.