Friday 7th January, 2022
On January 6th, HMRC announced it was making a change to the deadline for your 2020/21 tax return. In today's blog, we'll look at what's changed and how it affects you.
Yesterday's announcement should be welcome news for those that file their taxes online - but what has HMRC actually said?
Here's what you need to know: the deadline for this year's self-assessment tax return hasn't changed - it remains January 31st 2022.
HMRC have instead stated they will NOT charge any late filing penalties up until 28th February.
Essentially, this eases the financial burden on those that fail to file AND pay their tax bill by the end of January. However, that doesn't mean you won't have to pay extra.
It can be a little confusing, so let's break it down.
January 31st is still the deadline to submit your self-assessment tax return online. File and pay your taxes by this date and you won't have to pay any additional charges.
Unlike previous years, submitting your tax return in this window won't incur a late filing penalty charge of £100.
However, by missing the deadline, you WILL have to pay interest at 2.6% APR. Roughly, this works out as an extra payment of 0.2% of your total tax bill if you pay by the end of February.
Submitting your tax return after February 28th will mean you have to both a £100 late filing charge AND interest on your tax bill.
For example, if you owe £10,000 in tax and file and pay your bill in March, you'll need to make an additional payment of £118.52 - the £100 late filing charge and interest of £18.52.
Finally, if you file and pay your taxes from the 2nd April onwards, you will need to pay:
For a more detailed estimate of what you could owe, use the government's calculator for late self-assessment tax returns.
It's always best to not leave your tax return to the last minute. For a helping hand, check out our guide on adding pension contributions to your tax return.
In a word, COVID. HMRC advised that they decided they've made this decision to lessen the financial burden on UK taxpayers after a tumultuous time - particular y for the hospitality sector.
They hope this more flexible window will give those impacted the time they need to get everything in order.