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Self-Assessment late payment penalties relaxed

Simon Warne, Partner, Private Clients
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HMRC has announced that self- assessment customers will not be charged the initial 5% late payment penalty if they pay their tax or make a Time to Pay arrangement by 1 April. Normally, a 5% late payment penalty is charged on any unpaid tax that is still outstanding after 30 days.

The final payment due date  for 2019/20 self-assessment tax  is 31 January and daily interest is charged at an annual rate of 2.6%  from 1 February on any amounts outstanding.  Due to the impact of COVID 19, HMRC has recently announced it is giving taxpayers more time to pay or set up a formal payment plan. Any payment plans must be in place by midnight on 1 April to avoid a late-payment penalty being charged in addition to interest.

HMRC’s  self-serve ‘time to pay’ facility allows taxpayers with debts owing of up to £30,000  to spread the cost of their tax liabilities into monthly instalments through until January 2022.  Taxpayers with debts in excess of this will need to call HMRC to discuss their affairs before they register.  In order to gain access to the facility, taxpayers need to have filed all their tax returns and will need their unique taxpayer reference (UTR) and on-line activation code from HMRC.

For more information on the issues discussed in this article or to discuss your circumstances in more detail contact Simon Warne or your usual Crowe contact.

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Simon Warne
Simon Warne
Partner, Private Clients