HMRC has confirmed that they will not issue an automatic fine for individuals who do not file their self-assessment tax returns by the 31st January 2021 deadline. Continue reading for more information about what this means and the next steps to take if you are due to file a tax return.
HMRC will waive the £100 late filing penalty
Individuals who do not file their tax return by the 31st January deadline are automatically issued a £100 late filing penalty. However, HMRC has recognised the immense pressure that families, businesses, and individuals face this year as a result of the coronavirus pandemic and have adopted for a more lenient stance in 2021.
HMRC has announced that it will waive fines for taxpayers that miss the 31st January 2021 deadline, as long as they file an online tax return by the 28th February 2021.
Treasury Committee chairman and Conservative MP for Central Devon Mel Stride welcomed the announcement: “The decision will provide the flexibility that many individuals and businesses require during this difficult time.”
However, it is important to note that taxpayers are still required to pay their tax bill by the 31st January 2021, and interest will be charged on any outstanding liabilities from the 1st February 2021.
HMRC has encouraged individuals where possible to file their returns by the 31st January, but it understood that this might not be feasible for some people.
HMRC’s Chief Executive, Jim Harra said: “We want to encourage as many people as possible to file their return on time, so we can calculate their tax bill and help them if they can’t pay it straight away.
But we recognise the immense pressure that many people are facing in these unprecedented times and it has become increasingly clear that some people will not be able to file their return by 31st January.
Not charging late filing penalties for late online tax returns submitted in February will give them the breathing space they need to complete and file their returns, without worrying about receiving a penalty.”
Important changes to January 2021’s tax bill
Many businesses and individuals have suffered financially due to the coronavirus pandemic, and the January 2021 tax bill may seem like a daunting prospect. If you are worried about your upcoming tax bill, you can spread the payments over 12 monthly instalments with HMRC’s Time to Pay extension. You do not have to discuss this with HMRC first, and you can apply to set up your payment plan online once you have submitted your 2019/20 self-assessment tax return.
Speak to your account manager for more information
If you are a Bluebird Accountancy client and would like more information about the next steps to take if you are due to file a tax return or how to set up a Time to Pay arrangement, please contact your account manager.
For more information about our limited company accountancy services, please give our expert team a call on 0808 301 2389.