HMRC allows penalty-free extra month for 2020-21 tax

HM Revenue & Customs is waiving late filing and late payment penalties for self assessment taxpayers for one month, for 2020-21 tax returns and tax payments due by 31 January 2022.

HMRC is encouraging taxpayers to file and pay on time if they can – of the 12.2m taxpayers who need to submit their tax return by 31 January, almost 6.5m have already done so. The deadline to file and pay remains 31 January, and interest will also still be payable from 1 February.

However the concession recognises the pressure faced this year by self assessment taxpayers and their agents. COVID-19 is affecting the capacity of some agents and taxpayers to meet their obligations in time for the 31 January deadline. 

The penalty waivers will mean that:

• 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;
• anyone who cannot pay their self assessment tax by the 31 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 1 April.

The 2020-21 tax return covers earnings and payments during the first year of the pandemic. Taxpayers will need to declare if they received any grants or payments from the COVID-19 support schemes up to 5 April 2021 on their self-assessment, as these are taxable, including:

• 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.

The £500 one-off payment for working households receiving tax credits should not be reported in self assessment.

Click here for the official announcement.