Firstly, happy new year to all of my readers!
Now onto the important bit, in simple, HMRC are (technically) extending the deadline to complete self-assessment tax returns for the 2020-2021 period, from 31st January 2022 to 28th February 2022. This is due to HMRC understanding many people still have serious pressures on their business from COVID-related issues. Hurrah! However, there are of course some stipulations…
Now onto the hard facts of how this is going to work. The reason I used the term ‘technically’ in the above statement is because HMRC haven’t outright said they are ‘extending’ the deadline, but instead, they are waiving late filing and late payment penalties for one month…tomayto, tomahto…but just so you’re aware of the actual wording of this action.
Well at least we were given advanced warning on the change this time round. Last year we were told about the extension less than a week from the deadline!
So ‘technically’ (there it is again!) the deadline to submit your self-assessment tax return and pay any tax owed, remains the standard 31st January 2022. However they are removing late penalties as follows:
- If you were to submit your tax return after 31st January but before midnight on the 28th February 2022, then you wouldn’t incur any penalties for doing so
- If you do not pay your self-assessment tax or setup a ‘Time to Pay’ arrangement by the 31st January, then you will not incur any late penalties until 1st April 2022. So you actually have a 3 month extension in this regard, allowing you until 1st April to pay any tax owed without fear of penalties
PLEASE NOTE: One thing to bear in mind on that latter point however, the interest payable on any tax owed will be charged from 1st February at the standard 2.75%, so it’s always best to pay your tax on-time, but the option is there if you desperately need it. I know, I know…there’s always a catch!
So the moral of the story is…if you can submit your tax-return and pay any tax owed by the 31st January 2022 then I would strongly recommend it to avoid the 2.75% interest rate on any tax owed. But the removal of late penalty fees will definitely help those of you who really need the extra time.