Penalty deadline just two weeks away
HMRC allowed a generous relaxation of the rules surrounding penalties for late payment of tax for 2020/21. However, the deadline to act is fast approaching. What do you need to do if you owe tax for that year?
Usually, if you pay your balancing payment under self-assessment after 31 January, you'll be charged interest on the outstanding amount from 1 February. Furthermore, if anything remains unpaid 30 days later, a charge of 5% of the amount due is added to the bill. However, for 2020/21 there was a relaxation of this. The deadline to avoid a penalty for 2020/21 was moved to 31 March. But what you may not know is that a penalty can still be avoided if you can’t pay in full by this date. All you need to do is contact HMRC and agree a time to pay arrangement before the end of the month. No penalty will then be charged, as long as the arrangement is adhered to. Note that interest will still be charged from 1 February. Additionally, the penalty interest rate increased on 21 February 2022, from 2.75% to 3%.
You can make the arrangement via your personal tax account online, or by contacting HMRC on 0300 200 3822.
Related Topics
-
HMRC writes to non-domiciled taxpayers following rule changes
HMRC has begun issuing “one-to-many” letters to individuals affected by recent changes to the tax rules for non-UK domiciled taxpayers. The letters prompt recipients to review their tax position under the new regime. What does this mean if you receive one?
-
Can officers ignore minor input tax errors?
If your business has claimed input tax on an invoice where the supplier has charged VAT incorrectly, HMRC can disallow your claim by issuing an assessment. Can the officer waive that power to achieve a common sense outcome?
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?