Self Assessment: Extension but with Restrictions

Although HMRC made a late change to waive the £100 penalty on late Self Assessment returns filed after 31 Jan, that's where the charity ended with no respite for due payments or enquiries

Self Assessment: Extension but with Restrictions

As the director of a company you will typically file a self assessment personal tax return for each tax year to 5 April, due by the following 31 January along with required tax payments.

Given the year that we had in 2020 (for 'obvious reasons'), HMRC made an 11th hour change to waive the £100 penalty on 19-20 returns that missed the 31 Jan 2021 normal deadline - so long as they are duly filed by 28 Feb 2021.

1.8 million tax-payers promptly took advantage of HMRC's belated Christmas spirit in deferring filing their return by the due date.

HMRC were at pains to stress that any returns filed after 31 Jan would be treated as "late" so you're unfortunately not completely out of the woods if you've taken advantage of this 'olive branch' - added ramifications are an extended enquiry window and more penalty pain if you're late again next year.

Oh, and more pressing, there's zero extension to the due payment date - interest runs at a rate of 2.6% on payments made after 31 Jan 2021. So those with larger anticipated tax bills would be sensible to make an estimated provisional payment to mitigate interest charges.

Fortunately, 100% of our clients' self assessment returns were duly filed on time.  

From HMRC: Self Assessment 2021 facts summary:

  • 12.1 million SA returns due
  • 10,743,387 returns received by 31 January - this includes Expected Returns, unsolicited returns and Late Registrations
  • 10,351,387 Expected Returns received by 31 January (85.25% of returns expected)
  • 392,000 unsolicited returns/Late Registrations (3.65%)
  • 1,790,368 taxpayers missed the deadline (14.74%)
  • 10,274,940 returns were filed online (95.64% of total filed)

A return received online in February (within the permitted extension) will be treated as a return received late where there is a valid reasonable excuse for the lateness. This means that:

  • there will be an extended enquiry window
  • for returns filed after 28 February the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual
  • the payment deadline remains 31 January and interest will be charged on late payment. The current rate of late payment interest is 2.6%
  • a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, before 3 March 2021 - further late payment penalties are charged at 6 and 12 months, on tax outstanding where a payment plan has not been set up