Self-assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April, HM Revenue and Customs (HMRC) has announced.
This could apply to many UK catering equipment distributors and suppliers, who are often SMEs.
The payment deadline for self-assessment is 31 January and interest is charged from 1 February on any amounts outstanding. Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the Covid-19 pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan.
Taxpayers can pay their tax bill or set up a monthly payment plan online at gov.uk. They need to do this by midnight on 1 April to prevent being charged a late payment penalty.
The online Time to Pay facility allows taxpayers to spread the cost of their self-assessment tax bill into monthly instalments until January 2022.
More than 97,260 customers have set up a self-serve Time to Pay arrangement online, totalling more than £367m.
Jim Harra, HMRC’s chief executive said: “Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at gov.uk to help anyone struggling to meet their obligations.”
There are several ways that taxpayers can pay their self-assessment tax bill in full. They can pay online, via their bank, or by post. Taxpayers should still pay in full if they can, to stop interest accruing.
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-19 – can reduce their payments on account.
The taxpayers who have yet to file their 2019-20 tax return should file by 28 February to prevent being charged a late filing penalty of £100.