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Coronavirus Advice  •  Personal tax  •  Personal Taxation  •  Tax Planning

Self-Assessment late filing penalty scrapped for tax returns received by 28th February

By RJP LLP on 25 January 2021

HMRC have just announced that due to the COVID-19 pandemic, any self-assessment taxpayers who cannot file their tax return by the 31st January 2021 deadline will not receive the usual £100 late filing penalty. This applies provided they file their return online by 28th February.

In usual circumstances it would be necessary to provide a valid excuse for not meeting the 31st January deadline to have the penalty waived, but this year HMRC are assuming that anyone not able to file by 31 January has a good reason for being late.

Although you should still try to meet the original end of this month deadline, it is reassuring to know that you will not face a penalty if you miss the date.

In spite of the extra time available now, taxpayers are still obliged to pay their tax liability by 31st January. Interest will be charged from 1st February on any outstanding liabilities, at the rate of 2.6%, so it pays to be on time.

Taxpayers who cannot afford to pay their tax liability on 31st January as usual can apply online to spread it over a period of up to 12 months. To agree this, they will need to have filed their 2019/20 tax return beforehand. Note it is only possible to apply for time to pay online where the tax liability is less than £30,000; for larger liabilities it is necessary to telephone HMRC to discuss the request.

Taxpayers who are required to make payments on account, and know their liability is going to be lower than the previous tax year, for example due to loss of earnings because of COVID-19, can reduce their payments on account. This can be done by adjustment to the self-assessment.

HMRC’s Chief Executive, Jim Harra has said that HMRC recognises the immense pressure that many people are facing in these unprecedented times and by not charging late filing penalties for late online tax returns submitted in February, they hope to give people a bit more breathing space, without the worry of receiving a penalty.

If you need help with your tax return, please contact us via partners@rjp.co.uk

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30 April 2021 - ATED return deadline

If you own UK residential property valued at £500,000 or more in a limited company, the next deadline for filing ATED returns is 30 April 2021. This is needed even if there is no tax to pay. Be on time to avoid a penalty.