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
-
Homeworking: claiming input tax on subsistence expenses?
Some of your staff work remotely, but their homes aren’t suited to it. You have agreed to pay for rented office space, or for refreshments if they work from, say, a café. Can you claim input tax on these expenses?
-
Beating the landlord tax hikes
Once again, landlords will be hit by tax increases announced in the Budget, even if they are operating through a company. What are the changes, and can anything be done to mitigate them?
-
Electronic VAT return