Self Assessment Late Payment Surcharge Deferred

HMRC has confirmed that the initial 5% late payment penalty on self-assessed tax for 2019/20 won’t be charged if the tax is paid, or a time to pay arrangement is agreed, by 1 April.

In normal years, interest on outstanding Self Assessment tax liabilities begins from 1 February and a late payment penalty is also charged at 5% of any unpaid tax that is still outstanding on 3 March.

This year taxpayers now have until 1 April 2021 to pay any outstanding tax or make a time to pay arrangement and avoid the late payment penalty. (Interest will still be charged from 1 February.)

Revised SA timeline

31 January – Self Assessment deadline (paying and filing)

1 February – interest accrues on any outstanding tax bills

28 February – last date to file any late 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

Taxpayers urged to set up a payment plan

Taxpayers using the online time to pay facility will be able to spread the cost of their self assessment tax bill into monthly instalments until January 2022. For more about this facility, see https://www.gov.uk/difficulties-paying-hmrc