HMRC has announced that they are giving “self assessment taxpayers more time to ease COVID-19 pressures” and the date of 28 February 2022 is being suggested as a newly extended deadline to submit your tax returns by. (Instead of the usual deadline of 31 January.)
However, please don’t be fooled by the inaccurate headlines that are circulating! HMRC are not charging late filing penalties if you file your 2020/21 tax return by 28 February 2022, but this is not the same as an extension.
Your tax return will still be ‘late’ if it is not submitted by 31 January 2022. This means that:
**Late payment interest at 2.75% will accrue from 1 February 2022.**
So whilst penalties for late payment will not be charged, you will still incur additional costs through the interest on the monies owed.
Also, HMRC confirmed that no late payment penalties will be charged if you arrange a time to pay agreement by 1 April 2022. BUT late payment interest at 2.75% will accrue from 1 February 2022.
HMRC say that they are “giving millions of people more breathing space to manage their tax affairs” which is partly true, however other costs will be accrued in the usual way.
Therefore anyone considering submitting their self-assessment late may be better off doing so before 31 January 2022 if at all possible.