A major announcement on 6th January made by Jim Harra, HMRC’S Chief Executive and First Permanent Secretary comes as a relief for most taxpayers.
It was announced that due to the adverse developments of the COVID pandemic sweeping through the country and the impact that it has had on taxpayers and agents, the charges associated with not filing Self-Assessments by 31 January have been moved for the current 2021-22 tax year.
This means that:
- Late filing penalties will not be charged to self-assessment taxpayers who file their tax returns online by 28 February 2022.
- Penalties for late payment will also not be charged to taxpayers that pay the tax due in full or set up payment plans by 1 April 2022.
HMRC provided further supplementary information to support the new changes.
Firstly, taxpayers or their agents are still encouraged to make their declarations by 31 January. If this is not possible then the tax credits will be determined based on what information HMRC holds at the time. Declarations made by the revised deadline of 28 February will mean that HMRC will not levy charges if the delay was due to COVID. Furthermore, HMRC will not expect people for the individual or agent to prove that the delay was caused due to COVID reasons.
Secondly, self-employed taxpayers that claim certain contributory benefits must still ensure that their annual Class 2 National Insurance Contributions are paid on the original date 31 January 2022. Benefits may be affected if balancing payments aren’t paid by this date or a time to pay arrangement hasn’t been submitted.
Taxpayers may need to contact HMRC for assistance if they meet the following criteria.
- Self- employed customers who have profits below £6475 in the 2020/21 tax year and want to pay voluntary Class 2 NICs for Contributory Benefit after 31 January 2022, or
- Those who have paid voluntary Class 2 NICs via Self-Assessment before 31 January 2022 but will not file their return until after 31 January
Thirdly, it is worth noting that the payment easing also applies to SA700’s (Non-resident Company Income Tax Returns), SA800’s (Partnership Tax Returns), SA900’s (Trust and Estate Tax Returns) and SA970’s (Tax Returns for Trustees of Registered Pension Schemes).
If you would like to discuss the changes in more detail, please don’t hesitate to get into contact with our advisors here at Signature Tax.