Millions of self-employed Brits could still face being slapped with extra charges on top of their tax return - despite HMRC pushing back late filing and payment penalties.
HMRC has confirmed that self-assessment taxpayers who can’t file for the 2020/21 tax year by January 31 will not receive a penalty if they submit their return online by February 28.
The government charges a £100 penalty if you miss the self-assessment filing deadline – even if there's no tax to pay.
Further penalties of £10 a day are then applied after three months, up to a maximum of £900.
Anyone who can’t pay their tax by January 31 will also not be hit with a fine if they pay their tax in full or set up a payment plan by April 1.
If you miss the payment deadline, or don’t set up a payment plan, you’ll be charged 5% of the unpaid tax after 30 days, six months and 12 months.
But interest of 2.75% on outstanding payments will still accrue from February 1 - although they won't kick in until 30 days after the 31 January deadline.
It means taxpayers could still rack up extra charges even though HMRC is giving you more time to not receive a late filing or payment charge.
You won't be fined if you set up a "Time to Pay" agreement by April 1 - although again, interest is still applied after February 1.
Self-assessment taxpayers with up to £30,000 of tax debt can set up a "Time to Pay" plan through the Gov.uk website once they have filed their return.
The deadline to register for a self-assessment tax return was technically October 5, 2021.
For filing paper tax returns, the cut-off date was October 31, 2021 – so you must file your return online now to avoid paying a penalty.
You will be fined if you were to submit a paper tax return now.
Have you had trouble filing your tax return by the deadline? Let us know: mirror.money.saving@mirror.co.uk
Almost six million people still need to submit their tax return, according to latest HMRC data.
Royal London’s consumer finance specialist Sarah Pennells said: “People who will struggle to file their tax return by January 31 will welcome the fact that HMRC is giving them an extra month before it imposes any late filing or late payment penalties.
"But anyone who can file by the deadline of January 31 should do so.
"While you won’t have to pay a late filing penalty as long as you file your tax return by February 28, you will be charged interest from February 1 on any tax you owe.
"If you can’t make the January 31 deadline, try and file your tax return as soon as you can to avoid a last-minute rush before the end of February.”
Angela MacDonald, HMRC deputy chief executive and second permanent secretary, said: “We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19.
“Our decision to waive penalties for one month for Self Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.”
Lucy Frazer, financial secretary to the Treasury, said: “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs.
“Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.”
