HMRC has delayed late filing and payment penalties for self-assessment taxpayers by one month to help them cope with pressures caused by the pandemic.

The tax year ends on the 5th of April each year with tax returns filed electronically due by the following 31st January.

Given the impact of the coronavirus on the business world over the past two years anyone who cannot file their return by 31 January 2021 will not receive a late filing penalty if they file online by 28 February.

This does not affect the deadline for the tax payment which means that the tax will still fall due on 31 January despite the tax payer being unsure of the amount due.

As a result HMRC have confirmed that taxpayers unable to pay their self-assessment tax by 31 January will not receive a penalty if they pay in full, or set up a time to pay arrangement, by 1 April 2021.

Interest will be payable from 1 February as usual, however, so it is still better to file and pay on time, if possible.

John Cullinane, director of public policy for the Chartered Institute of Taxation welcomed the delay but warned: “Taxpayers should beware that this is not a deferral of the tax return deadline itself. Where possible taxpayers should continue to file their return and pay any tax due by 31 January, as interest will still accrue from 1 February.

“This is not an opportunity for tax advisers to ‘shelve’ their tax obligations. A £100 late filing penalty could still apply if the tax return is not filed by midnight on 28 February.”

It is advisable to prepare your tax return as early as possible to allow appropriate opportunity to take advantage of any tax planning opportunities. As such our advice is to always take the assistance of a professional accountant.

Need assistance with your tax affairs; please contact our team who are happy to help.