HMRC extend Self Assessment deadline

As we head through January, for many the Self Assessment deadline of 31 January hangs over us, making us feel as grey as Eeyore. However, this year there is a little good news from HMRC. Well sort of.

Many people up and down the country may be sighing with relief at the thought of HMRC’s uncharacteristic gesture of goodwill. HMRC have announced that they are effectively giving taxpayers some breathing space by extending the annual deadline by a month, until 28 February.

This has been prompted by HMRC’s understanding of the pressures and strains the pandemic has put many households under up and down the country, as household expenses hit everyone’s pockets and energy bills increase.

What does this really mean?

Do we relax and procrastinate with our tax returns until towards the end of February? Well, no it’s probably best not to. If you are one of the estimated 5.7 million people who have not yet got down to business and filed your 2020/2021 tax return, then you would be better off doing so now.

Normally the deadline for completing a tax return is 31 January. If you fail to do so then HMRC will automatically raise a late filing penalty of £100.

In essence, the extension means:

  • the deadline to file the tax return is still 31 January
  • you therefore need to pay any tax due by 31 January
  • any late payment of tax continues to attract interest; interest is payable from 1 February
  • HMRC are only delaying the late filing penalty until 28 February to give people a little more time. So, provided you submit your return by 28 February you will avoid the late filing penalty
  • those who are struggling and cannot pay their tax by the 31 January deadline will avoid a late payment penalty by a month

The moral of the story

It’s probably best if you can to join the 6.5 million people who have already filed their returns. The smarter option, it seems, would be to submit your return as usual.