The tax payable under self assessment was due for payment on or before 31 January. Interest and penalties are charged on late payment. For tax due for 2020-21, HMRC is waiving the first 5% charge that is usually charged on 3 March; instead, it’s giving taxpayers until midnight on 1 April 2022 to either pay the full balance or set up a Time to Pay arrangement. If you fail to do this by 1 April, the late payment charges will apply as usual.
Interest will still be charged from 1 February at 2.75% – which is not tax deductible as a business expense.
You could also face the following penalties if you pay late:
• After 30 days: a charge equal to 5% of the tax outstanding,
• After six months (31 July): a further 5%.
• After 12 months (31 January the following year): an additional 5%.
You can find details of the Time to Pay arrangement at the HMRC website (link below)
https://www.gov.uk/guidance/find-out-how-to-pay-a-debt-to-hmrc-with-a-time-to-pay-arrangement
Give us a call if you need to discuss any matters further in relation to tax payments.
