Self-Assessment: Payment deadline update

Due to the Covid 19 Pandemic still affecting people’s lives and businesses, HMRC have announced some changes to Self-Assessment payments payable from 31st January 2022.

Late Payment

A late payment penalty which is 5% of the outstanding tax liability is usually issued 30 days following the tax due date; however, this has been extended to the 1st April 2022.

The following late payment penalties will apply if the tax remains outstanding and are calculated from the tax return filing deadline 31st January:

  • 6 months late – 5% of tax outstanding at that date
  • 12 months late – 5% of outstanding tax at that date

No late payment penalties will be applied to Payments on Account.

Please keep in mind, although the late payment penalties have been postponed, late payment interest still applies.

Interest will be accrued at a rate of 2.75% up to 20th February 2022, this rate does then increase to 3% starting 21st February 2022.

Time to Pay Agreement

To enter a time to pay agreement with HMRC, individuals have the option of the self-service time to pay facility.  This can be accessed via the government gateway login, however, you must meet the following conditions:

  • You must have filed your latest tax return
  • The tax liability must be less than £30,000
  • The plan is put in place before 2 April 2022
  • You plan to pay off the debt within the next 12 months or less

If the tax liability is more than £30,000, or if more than 12 months is required, then the individual will need to contact HMRC’s helpline on 0300 200 3822.

What happens if you do not contact HMRC or refuse to pay

If you do not get in contact with HMRC or cannot agree on an instalment plan then HMRC may:

  • ask a debt collection agency to collect the money
  • collect what you owe directly from your wages or any monthly pension payments you get
  • take you to court