Self Assessment Tax Return Penalties Waived Until End Of February

Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February, HM Revenue and Customs’ (HMRCs’) Chief Executive Jim Harra has announced.

More than 8.9 million customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible.

But anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February.

Taxpayers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities. Customers can pay online, or via their bank, or by post before they file. More information on how to pay is at GOV.UK.

Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before setting up a time to pay arrangement, so HMRC is encouraging everyone to do this as soon as possible.

HMRC’s Chief Executive, Jim Harra, said:

We want to encourage as many people as possible to file their return on time, so we can calculate their tax bill and help them if they can’t pay it straight away.

But we recognise the immense pressure that many people are facing in these unprecedented times and it has become increasingly clear that some people will not be able to file their return by 31 January.

Not charging late filing penalties for late online tax returns submitted in February will give them the breathing space they need to complete and file their returns, without worrying about receiving a penalty.

We can reasonably assume most of these people will have a valid reason for filing late, caused by the pandemic.

Normally, late filing penalties are applied to all returns filed after the 31 January deadline. Those penalties are cancelled if the customer has a reasonable excuse for filing late. However, this year HMRC is not issuing late filing penalties for a month to help taxpayers and agents who are unable to meet the deadline. Late filing penalties will not be issued for online tax returns received by 28 February.

HMRC has previously said that it was keeping the situation closely under review. It has become increasingly clear from the filing rate that some taxpayers and agents cannot file on time, and the department has now determined that ensuring no customers will receive late filing penalties if they file online before the end of February is the best way to help them.

More than 42,000 customers have already used the service, without needing to call HMRC, to manage their liabilities, totalling almost £130 million.

HMRC has increased support for customers who may need help with their tax liabilities. Once they have completed their 2019 to 2020 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments.

Customers can apply for self-serve Time to Pay via GOV.UK. Interest will be applied to any outstanding balance from 1 February 2021.

More than 25,000 customers have already used the service, without needing to call HMRC, to manage their liabilities totalling £69.1 million.

Customers with bills over £30,000, or who need longer than 12 months to pay their bill, can call HMRC 0300 200 3822 to discuss Time to Pay.

Customers who are required to make payments on account, and know their bill is going to be lower than the previous tax year, for example due to loss of earnings because of COVID-19, can reduce their payments on account. Visit GOV.UK to find out more about payments on account and how to reduce them.

Customers who are trying to contact HMRC in the run up to the deadline can do so via webchat, Twitter or the Self Assessment phone helpline. They may also find the information they need via the free HMRC app or their Personal Tax Account.

The phone helpline and webchat will both be open on 30 and 31 January, in addition to the weekday service.

Opening times are:

• phone and card payment lines: Saturday 30 January: 8am to 6pm and Sunday 31 January: 9am to 6pm

• webchat: Saturday 30 January and Sunday 31 January: 8am to 8pm

To protect against identity fraud customers must verify their identity when accessing HMRC’s online services. They must have 2 sources of information including:

• credit reference agency data
• tax credits
• P60/payslip
• UK passport

Further information

Find more information on Self Assessment tax returns.

HMRC expects more than 12.1 million people to complete a Self Assessment tax return for the 2019 to 2020 tax year.

Help and support is available to customers completing their Self Assessment tax return.

Customers will need to pay their tax bill by 31 January. Guidance on ways to pay is at GOV.UK.

Customers with Self Assessment debts over £30,000, or who you need longer than 12 months to pay, may still be able to set up a Time to Pay arrangement by calling the Self Assessment Payment Helpline on 0300 200 3822.

Where tax credits customers are unable to report their final/actual income for the tax year 2019 to 2020 by 31 January 2021, they should report the figure as soon as possible after 31 January. In most cases HMRC will update the income used to calculate finalised entitlement to tax credits if the delay is due to the impact of COVID-19.

Self Assessment customers who need to claim a contributory benefit soon after 31 January 2021 need to ensure Class 2 National Insurance contributions (NICs) payments are paid. This is to make sure their claims are unaffected. Class 2 NICs may be affected if they:

• couldn’t pay all of their 2019 to 2020 Self Assessment liabilities by 31 January 2021
• have entered into a Time to Pay arrangement to pay off those liabilities through instalments

As Class 2 NICs are included in their 2019 to 2020 Balancing Payment, they may not have paid the necessary Class 2 NICs payments by 31 January 2021. Affected customers should contact HMRC on 0300 200 3822 for help as soon as possible.