HMRC Announcement For Tax Return 2021

Today HMRC Has Announced That We Will Not Charge

1. Late filing fees for those who submit electronically by February 28, 2022.
2. Penalties for late payments if the tax is paid in full or a payment plan is established by April 1 2022. This will function similarly to the analogous waivers from last year, giving clients and their agents more time if required. Nearly 6.5 million customers have complied with HMRC’s request to file and pay on time if they can.

For the benefit of customers, our Time to Pay alternatives is still accessible. Customers can set up an online payment plan to stretch out Self Assessment expenses of up to £30,000 over and up to 12 monthly instalments once they have filed their 2020–21 tax return.

HMRC is providing clients additional time to pay or set up a payment plan this year, much like last year. Self-assessment payments must be made by January 31; if they are not, interest will start to accrue on those balances on February 1. On any unpaid tax that is still due on March 3, a 5% late payment penalty is typically applied.

Customers who pay their taxes or establish a payment schedule by midnight on April 1 will not be assessed the 5% late payment penalty. On the GOV.UK website, they can pay their tax bill or set up a monthly payment schedule.

Other duties are unaffected, and neither the filing nor payment deadlines have changed. This implies:

• Late payments will incur interest charges. From January 4, 2022, the interest rate for late payments is 2.75 per cent.
• If there is a legitimate, plausible explanation for the lateness, a return submitted online in February will not be considered received in time. This implies:
  • There will be a longer timeframe for inquiries.
  • The other late filing penalties (daily penalties from 3 months, 6 months, and 12 months penalties) will continue to apply to returns filed after February 28.
  • If tax was still owed by midnight on April 1, 2022, and a payment plan has yet to be established, a 5% late payment penalty will be assessed. If a payment plan has not been established, additional late payment penalties will be assessed on unpaid tax at the standard 6 and 12-month points (August 2022 and February 2023, respectively).
• Because SA700s and SA970s can only be filed on paper, we won’t impose late filing penalties for those forms that were received in February.
• The deadline for electronically filing SA800s and SA900s was the end of February; the deadline for filing SA800s and SA900s on paper was October 31.

Customers who submit paper returns after the deadline will be assessed a late filing penalty as usual. If they can provide a valid justification, they may be able to contest this penalty.

• To ensure that their claims are unaffected, self-employed clients must make sure that their annual Class 2 National Insurance payments (NICs) are paid on time if they anticipate using certain contributing benefits before January 31 2022.
• 2020 to 2021 balancing payment must be made by January 31, 2022, including Class 2 NICs. Benefit eligibility could be impacted if the:
  • Were unable to make their balancing payment before January 31, 2022, and
  • Have made the balancing payment and other self-assessment tax obligations repayable through a Time to Pay arrangement.

Customers who are affected should call HMRC at 0300 200 3822 as soon as possible for assistance.