HMRC has confirmed that taxpayers who need to complete income tax returns for the year ended 5th April 2020 but have not filed them by the 31st January 2021 will not face late filing penalties. This is on the provision that returns are filed by 28th February 2021. This step was taken by HMRC following lobbying in light of the ongoing disruption caused by COVID.
However, you must still settle your income tax liabilities by 31st January 2021, and interest will apply for any late payments. If you cannot pay your income tax by 31st January 2021, you can apply online to spread your tax bill over 12 months after your income tax return has been filed to 31st January 2022. There will be an interest charge on this payment plan.
We recommend that all clients have their tax returns filed by 31st January. You will know the correct amount of income tax to pay on 31st January 2021, and you can, therefore, avoid any unnecessary interest costs.
If you require guidance on these changes, then please contact your TC partner on 0330 088 7111.