Taxpayers have been reminded that a penalty deadline for unpaid Self-Assessment tax is imminent.
HM Revenue & Customs (HMRC) will automatically add a penalty to your tax bill equal to five per cent of the Self-Assessment tax you owe for 2021/22 which is unpaid after midnight on 2 March 2023. So urgent action is needed.
The deadline for sending most online 2021/22 Self-Assessment returns to HMRC, and for paying the related tax, was 31 January 2023.
More time
Due to the coronavirus pandemic, HMRC had previously allowed taxpayers more time to file their tax returns and pay the tax before charging penalties.
There was no such relaxation this year and taxpayers should have filed their returns for 2021/22 tax return online and paid what was owed by the end of January.
Taxpayers who had not settled their unpaid tax by that date have started to accrue late payment interest.
Taxpayers who have difficulty paying the tax due may be able to arrange a payment plan online.
Interest charges
Individuals who want to make regular monthly or weekly payments towards their tax bills are also able to set up a budget payment plan with HMRC online. Late payment interest will continue to apply to the balance that remains outstanding.
For returns that remain unsubmitted, daily penalties will kick in if a return has not been filed online by 1 May 2023.
According to HMRC figures, more than 11.7 million taxpayers filed their tax returns before the 31 January 2023 deadline, but 600,000 taxpayers still missed the deadline.
HMRC was expecting around 12.1 million tax returns to be filed for the 2021/22 tax year. Of these expected returns, 11.4 million were submitted on time, along with 0.3 million unsolicited returns and late registrations.
Need advice with Self-Assessment and related tax matters? Contact us today.