Self-assessment tax returns: HMRC waives £100 late fine for up to a month

HMRC will waive late fines by up to a month for anyone who files their self-assessment tax return after the annual deadline of 31 January 2022. The usual £100 penalty for late filings will not be enforced as long as the return is successfully filed by 28 February 2022. Late payment fines will also be waived for a short period to allow customers additional time to complete the process.

In this article, we explain why HMRC is pausing late penalties on self-assessment tax returns, the deadlines you need to know about, and how to estimate any late charges you could receive.

Why is HMRC waiving late fines for self-assessment tax returns?

The decision to pause late fines was made due to the ongoing pressures caused by the Covid-19 pandemic, which HMRC says has made it more difficult for individuals and advisors to file their tax returns by the usual deadline. Waiving the fines will give the taxpayers that need it more time to complete and file their return online without worrying about receiving a penalty.

Around 6.5 million people have already filed their tax returns for the 2020-21 financial year - just over half of the 12.2 million that need to do so - but HMRC is encouraging all those that have yet to do so to file and pay the required tax by the usual deadline to avoid interest payments that will be due from 1 February onwards.

When do I need to file my self-assessment tax return?

The official deadline to file and pay remains 31 January 2022, but no late fines will be issued until 28 February 2022.

However, there are slightly different dates to bear in mind for filing and paying your self-assessment tax return. Anyone that fails to file by the deadline will not receive a late filing penalty as long as they file online by 28 February 2022. Anyone who does not pay by the deadline will not receive a late payment penalty as long as they pay it in full - or set up a Time to Pay arrangement to do so in instalments - by 1 April 2022.

Despite this, HMRC will charge the usual interest from 1 February 2022 for payments not made by the official deadline, so it is still important to file and pay by the 31 January 2022 deadline if you want to avoid any additional charges.

Action	Deadline	Late fine waiver until*
Filing your self-assessment tax return	31 January 2022	28 February 2022
Paying your self-assessment tax return	31 January 2022	1 April 2022

*Interest will still be charged from 1 February 2022.

How to estimate your late self-assessment tax return penalty

The government website includes a useful calculator which you can use to estimate the penalty for a late self-assessment tax return or payment. Simply start by selecting the tax year you are estimating for and if you are sending your return online or by paper.

What to do if you cannot pay your self-assessment tax return in time

If you are unable to pay your self-assessment tax return in time for the late fine waiver of 1 April 2022, you can contact HMRC and set up a Time to Pay arrangement, which allows you to make your required payment in manageable instalments.

You can make your own Time to Pay schedule on the government website as long as you meet the following criteria:

• Have filed your latest tax return
• Owe less than £30,000
• Are within 60 days of the payment deadline
• Plan to pay your debt off within the next 12 months or less

If you do not meet the above criteria - for example, you owe more than £30,000 in tax - you can contact the self-assessment tax return helpline for advice on 0300 200 3822. The telephone line is open 8am-6pm (excluding public holidays) from Monday to Friday.

You must set up a payment plan by 1 April 2022 to avoid receiving a late-payment penalty.

More on tax

For more information on everything to do with tax, check out the following articles:

• NI to rise and new tax for 2023: How the new rate hike will affect you
• 39 simple ways to pay less tax
• What to do if you are struggling to pay your council tax
• The 10 best ways to avoid inheritance tax