If you benefited from HMRC’s filing extension, make sure you avoid the 5% penalty
Around 1.8 million individuals benefited from a hard-fought campaign which encouraged HMRC not to charge a late filing penalty – provided that returns were submitted online by 28 February.
HMRC has confirmed that the initial 5% late payment penalty on self-assessed tax won’t be charged if the tax is paid, or a time-to-pay arrangement is agreed, by 1 April. For a time-to-pay arrangement, you need to know the amount of tax due.
As a reminder, anyone who cannot pay their bill in full can apply to spread the cost. Taxpayers can set up a payment plan, in up to 12 monthly instalments, via GOV.UK, provided that they meet the following requirements:
- they have no
– outstanding tax returns
– other tax debts
– other HMRC payment plans set up
- the debt is between £32 and £30,000
- the payment plan is set up no later than 60 days after the due date for payment but ideally as soon as possible – and certainly before 1 April to avoid a 5% late payment penalty.
Those who do not meet these requirements, or who need more than 12 months to pay off their bill, can apply for a payment plan by speaking to one of HMRC’s debt advisers.
This article has been shared from ACCA In Practice, to whom copyright belongs. Whitefield Tax are an ACCA Member Firm