|Last month, HMRC said that due to the impact of the Covid pandemic, they were giving Self Assessment taxpayers more time to pay their tax or set up a payment plan without facing a five per cent late payment penalty charge, as long as arrangements were in place by midnight on April 1, 2021.
Those who have yet to settle their liabilities for the 2019 to 2020 financial year can pay their tax bill or set up a monthly payment plan online at gov.uk. Payment can be made online, via banks, or by post. Alternatively, setting up a Time to Pay arrangement allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.
Almost 117,000 taxpayers have set up a self-serve Time to Pay arrangement online, totalling more than £437 million.
There is no change to the payment deadline and other obligations are not affected. This means that:
- The payment deadline remains January 31 2021 and interest will be charged on late payment. The current rate of late payment interest is 2.6 per cent
- A five per cent late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on April 1, 2021. Further late payment penalties are charged at six and 12 months (August 2021 and February 2022 respectively), on tax outstanding where a payment plan has not been set up.
Self Assessment taxpayers who are required to make Payments on Account and know their 2020 to 2021 tax bill is going to be lower than in 2019 to 2020 – for example due to loss of earnings because of Covid – can reduce their payments.
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Susie Hughes © Shout99 2021