HMRC relax Self-Assessment penalties.

Article | Martin Roberts | 23rd February 2021

If you have any questions or concerns please do not hesitate to speak to your PEM contacts directly

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HMRC have just announced a temporary relaxation of the rules relating to the late payment penalty for tax due for the year ended 5 April 2020. This follows the previous extension of the filing deadline from 31 January to 28 February 2021.

This announcement, made on Friday 19 February, states HMRC will not be charging the initial 5% late payment penalty in the following circumstances:

  • The tax due for 2019/20 is settled by 1 April 2021; or
  • A “Time to pay” arrangement is agreed and put in place by 1 April 2021.

This penalty is normally imposed if the outstanding tax is not paid within 30 days of the normal payment deadline of 31 January following the end of the tax year.

Where an individual is unable to make full payment by the start of April, they can apply to HMRC to request a “Time to pay” arrangement to spread payment over a period of up to 12 months. Such an arrangement can include any deferred on-account tax payments which were originally due at the end of July 2020.

For individuals with tax bills of £30,000 or less, it should be possible to apply for a “Time to pay” arrangement electronically via the government website.

Alternatively, there is a dedicated telephone number for the Self-Assessment Payment Helpline, being 0300 200 3822. This helpline is open between 8am and 6pm, Monday to Friday.

However, it is important to note that HMRC will continue to charge interest on any outstanding taxes even if a “Time to pay” arrangement is put into place.

Although, as agents, PEM will be unable to be directly involved in any “Time to pay” arrangements, please contact us if you have any concerns about your tax affairs or want to know more, as we will be happy to discuss your position with you.

About the author

Martin Roberts

Martin is a Manager in our Private Client team who specialises in income tax and capital gains tax advice.