2.3m taxpayers miss self assessment deadline
More than 10.2 million taxpayers filed their 2020/21 tax returns by the 31 January deadline, down 500,000 on the previous year, leaving 2.3m taxpayers failing to file on time, HMRC has confirmed
Deadline day saw 630,000 taxpayers filing their returns and the peak hour for filing was 16:00 to 16:59 when 52,475 completed their self assessment. There were 20,947 taxpayers who completed their tax return between 23:00 and 23:59.
Online filing figures hit 95.6% this year with only 4.4% of returns sent on paper forms with 452,629 taxpayers sticking to the old format.
More than 12.2m taxpayers were expected to file a self assessment tax return this year. The remaining 2.3m taxpayers expected to file by 31 January now have until 28 February to submit their late 2020/21 tax return and avoid a late filing penalty.
For anyone who is yet to pay their tax bill or set up a payment plan, interest will be applied to outstanding balances from 1 February. People have until 1 April to pay their tax in full, or set up a time to pay arrangement, to avoid a late payment penalty.
Robert Salter, tax services director at Blick Rothenberg said: ‘Taxpayers will be left with a surprise in relation to interest and surcharges for late payment of tax if they wrongly believe the extension also applies to paying their tax. Any late paid amounts will attract daily interest at 2.75%, annualised rate, and a 5% surcharge if not paid by 2 March.
‘In addition, even though tax returns filed by 28 February will not be late for basic late payment penalties, in other ways, the tax return will still be ‘late’, which can mean, for example, that the deadline for HMRC to raise an enquiry into the tax return is automatically extended.’
Those who are not yet able to file their tax return should pay an estimated amount as soon as possible, which will minimise any interest. Self-employed people can use the calculator on gov.uk to help estimate their tax bill.
Myrtle Lloyd, HMRC’s director general for customer services, said: ‘I’d like to thank the millions of customers and agents who sent us their tax return and paid in time for this week’s deadline.
‘We’re waiving penalties this year, to give those who missed the deadline an extra month. And customers can set up a monthly payment plan online if they’re worried about paying their tax bill.’
The existing Time to Pay service allows taxpayers, who are unable to pay their bill in full, to spread their tax payments into manageable monthly instalments. Self assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.
For outstanding bills of more than £30,000, it is important to contact the self assessment payment helpline on 0300 200 3822.
The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers will need to declare if they received any grants or payments from the Covid-19 support schemes up to 5 April 2021 on their self assessment, as these are taxable, including:
- Self-Employment Income Support Scheme
- Coronavirus Job Retention Scheme
- other Covid-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme
The £500 one-off payment for working households receiving tax credits should not be reported in self assessment.
HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. Taxpayers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their self assessment return online securely and free of charge. HMRC sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to search GOV.UK for ‘HMRC scams’.
Self assessment timeline
- 31 January – self assessment deadline (filing and payment)
- 1 February – interest accrues on any outstanding tax bills
- 28 February – last date to file any late online tax returns to avoid a late filing penalty
- 1 April – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment penalty
- 1 April – last date to set up a self-serve Time to Pay arrangement online
There is no change to the filing or payment deadline and other obligations are not affected. This means that interest will be charged on late payment. The late payment interest rate is 2.75%
A return received online in February will be treated as a return received late, with a valid reasonable excuse for the lateness. This means that:
(i) there will be an extended enquiry window;
(ii) for returns filed after 28 February the other late filing penalties (daily penalties from three months, six and 12 month penalties) will operate as usual;
(iii) a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022. Further late payment penalties will be charged at the usual six and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.