Almost 100,000 Self Assessment filers have used online payment plans to spread the cost of their tax bill into manageable monthly instalments since April 2021, HM Revenue and Customs (HMRC) has revealed.
Once a customer has filed their 2020 to 2021 Self Assessment tax return, they can set up a Time to Pay arrangement for up to 12 months on debts up to £30,000, that they’re unable to pay in full. This can be done online at GOV.UK without speaking to HMRC.
Since April 2021, Self Assessment filers have used the online Time to Pay service for more than £310 million worth of tax instalments. If they owed more than £30,000, or needs longer to pay, contact HMRC to discuss payment options.
The deadline for filing returns, paying tax owed or setting up a payment plan was 31st January 2022, but this year, HMRC has given extra time to meet obligations without facing penalties. This means:
- anyone who did not file their return by the 31st January 2022 deadline will not receive a late filing penalty if they file by 28th February 2022
- anyone who did not pay their tax liabilities by the 31st January 2022 deadline will not receive a late payment penalty if they pay their tax in full, or set up a time to pay arrangement, by 1st April 2022
From 1st February 2022, all outstanding amounts are subject to interest.
Myrtle Lloyd, HMRC’s Director General for Customer Services:
We understand some … might be worrying about paying their Self Assessment bill this year, and we want to support them. To see if you’re eligible to set up a payment plan, go to GOV.UK and search ‘pay my Self Assessment’.
The 2020 to 2021 tax return covers earnings and payments during the pandemic. Filers will need to declare if they received any grants or payments from the COVID-19 support schemes up to 5th 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.
It is important that filers check and make any changes to their tax return to make sure any Self-Employment Income Support Scheme or other COVID-19 support payments have been reported correctly.
HMRC urges everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. Filers should always type in the full online address http://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 customers are in doubt, do not to reply directly to anything suspicious, but contact HMRC straight away and search GOV.UK for HMRC scams’.
If SA filers owe more than £30,000, or need longer to pay, they should call the Self Assessment Payment Helpline: 0300 200 3822.
A full list of the payment methods that can be used to pay a Self Assessment tax bill is available on GOV.UK.
There are no changes to the filing or payment deadline and other obligations are not affected. This means that:
- interest is charged on late payment at 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:
- there will be an extended enquiry window
- for returns filed after 28th February 2022, late filing penalties (daily penalties from 3 months, 6 and 12 month) will operate;
- a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1st April 2022. Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.
- HMRC will not charge late filing penalties for SA700s and SA970s received in February 2022. These returns can only be filed on paper
- for SA800s and SA900s HMRC will not charge a late filing penalty if filed online by the end of February 2022. The deadline for filing SA800s and SA900s on paper was 31st October. Those who file late on paper will be charged a late filing penalty. They can appeal against this penalty if they have a reasonable excuse for filing their paper return late
Those who are required to make Payments on Account, and know their bill is going to be lower than the previous tax year, for example due to loss of earnings because of COVID-19, can reduce their Payments on Account. Visit GOV.UK to find out more about Payments on Account and how to reduce them.