This year, due to the continuing impact of COVID-19, HMRC is giving taxpayers more time to pay or set up a payment plan. Self-Assessment taxpayers will not be charged the initial 5% late payment penalty in relation to the 2019/20 tax liability if they pay their tax or agree a Time to Pay arrangement with HMRC by 1 April 2021.

The payment deadline for Self-Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding. This payment deadline has not changed.

Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March, 30 days from the payment deadline of 31 January. This year the date has been extended until 1 April.

Payment plans or payments in full must be in place by midnight on 1 April to avoid a late payment penalty.

Time to Pay arrangements for Self-Assessment taxpayers

HMRC’s Time to Pay facility allows eligible taxpayers to apply to set up a Self-Assessment payment plan online, whereby instalments are made by Direct Debit, allowing customers to spread the cost of their tax liabilities into monthly instalments until January 2022 where they are not able to make payment by the due date.

Self-Assessment taxpayers who have yet to file their 2019 to 2020 tax return should file by 28 February to prevent being charged a late filing penalty.

How we can help

Whilst this late payment penalty extension is welcomed, where possible, taxpayers should still pay in full, as this is the only way to stop interest accruing.

If you have any further questions on Time to Pay arrangements, please get in touch with our experts.

Anyone worried about paying their tax can also contact HMRC for help and support on 0300 200 3822.