Tax payments due 31 January
This a quick reminder that tax due for last year and payments on account for the current year are due by 31 January. Clients who have completed their tax returns will have the details in the tax return documentation sent out with their return. Details of how to pay if you have not received a payslip from HMRC can be found at Pay your Self Assessment tax bill – GOV.UK (www.gov.uk). The reference to quote is your 10 digit tax reference number which can be found on the front of your tax return with a “K” on the end.
Interest will be charged on tax paid late. Late payment penalties for last year’s tax normally charged for payment after 28 February will be not be charged if payment is made by 1 April 2022 or a payment plan agreed with HMRC.
To avoid penalties for late payment, if you cannot clear all SA tax and NIC due as of 31 January 2022, you can agree a plan to clear amounts due by monthly instalments. As long as you reach agreement on a Time to Pay arrangement before 1 April 2022, no late payment penalties will apply.
For most SA taxpayers with tax liabilities of £30,000 or less an application can be made using HMRC’s online, self-serve Time to Pay facility https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments . If this is not possible, taxpayers should contact HMRC’s Time to Pay team on 0300 200 3822.
PLEASE NOTE interest will still be charged on late payments and the rate charged will be 2.75%.
Tax return filing deadline
Tax return filing deadline strictly remains 31 January 2022, however HMRC have stated that they will NOT charge penalties for 2020-21 returns submitted by 28 February 2022. Other late filing penalties – daily penalties from 3-months, 6 and 12-months – will operate as usual.
To avoid missing the extended, 28 February filing date we recommend that you complete and file your outstanding 2020-21 SA return as soon as possible. This process will quantify any taxes due and give you time to consider your payment options; including if required contact with HMRC to agree a formal Time to Pay arrangement before 1 April 2022.
For more information or to discuss any issues raised above please contact Simon Bell by phone on 01376 571358 or email [email protected] . This article is written in general terms and therefore cannot be relied on to cover specific situations . Applications of the principles set out will depend on particular circumstances. It is recommended that you take professional advice before acting or refraining from acting on any of the above content.