Self assessment (Income Tax) – Filing penalty relief and time to pay payments
HMRC have given a slight relief on their 31 January deadline for the filing of tax returns – but its not all good news. The deadline hasn’t changed – its still 31 January 2021, and HMRC expect tax to be paid by then. They have given relief for 1 month only, on the late filing penalty of £100 – as long as you file by 28 February 2021.
This isn’t really the concession that its being made out to be, HMRC have said for quite a while now that no one should pay a penalty for reasonable COVID-19 related delays filing their tax returns, but you would only be ‘forgiven’ the penalty if you made an appeal. After the 28 February, at time of writing there is no indication of an extension.. so you’ll need to appeal again, and hope for the best.
Its important to know that though you may not receive automatic £100 penalty, any tax payments are still due from 31 January 2021 – and HMRC will charge interest from 1 February 2021.
The best thing to do if you cannot pay your tax, is to contact HMRC’s time to pay team. They will go through your options, and are being quite generous at the moment due to the pandemic. You can also apply to pay liabilities less than £30,000 over 12 months using your online tax account – its self administered. HMRC are still charging interest as far as we can see.
Self assessment (Income Tax) – Refunds
We’ve noticed that not all refunds are arriving in a timely manner – if you are still waiting on a refund now, its worthwhile checking your online tax account and making a manual refund request. If you received less than you were expecting, your first payment on account may also have been deducted from your tax refund.
VAT Deferment (COVID-19 Provision March – June 2020)
Remember that deferment in the first 3 months of the pandemic measures? The due date is 31 March 2021 for full and final settlement.. it’s come around quickly, and from what we can tell the people that needed that help in the first place are unlikely to be much better off than they were when they took the option. HMRC will allow you to set up an 11 month payment schedule using your online tax account – again, interest may be due.
There aren’t any new concessions on VAT payments – if you cannot pay anything, contact HMRC before 31 March, rather than leaving it until after the due date.
All other taxes are due as would be expected – there are not currently any deferment options or extensions. HMRC are offering time to pay, but you’ll need to contact them in order to apply.