HMRC has taken this approach in recognition of the impact of Covid on taxpayers’ ability to complete their self assessment. It’s worth noting this easement is for late filing penalties only. It does not affect any other tax obligations. A return received in February will be treated in the same way as a return filed in February in a ‘normal’ year where there is a reasonable excuse – the penalty will not be charged but the return is treated as late for the purposes of enquiry windows, etc.
Any tax owed still needs to be paid by 31 January. Interest will be charged from 1 February on any outstanding liabilities. If any tax remains outstanding on 3 March, customers will be charged a late payment penalty of 5% of the amount still due.
Taxpayers that don’t pay in full by 31 January can use the Self Serve Time to Pay service on GOV.UK to set up an affordable plan where they can pay over time in instalments. Interest will still be charged but if they set up the payment plan before 3 March, taxpayers won’t be charged a late payment penalty as long as they keep to the terms of the payment plan.
The easement for late filing penalties will be applied to SA700s and SA970s filed in February. These returns can only be filed on paper.
For SA800 and SA900 HMRC will apply the easement if customers file online by the end of February. Their paper deadline was 31 October so if taxpayers file on paper in February they will not get the easement.
Those taxpayers affected by HMRC Exclusions, who had until 31 January to file on paper, will avoid a late filing penalty provided they file their return by 28 February