Taxation: Self-assessment

(asked on 30th December 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the effect of the covid-19 outbreak on income levels for self-assessment taxpayers, what assessment he has made of the level of (a) interest and (b) penalties that will be charged to self-assessment taxpayers who do not meet the deadline of 31 January 2021 for payment of tax for tax year 2019-20.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 11th January 2021

The Government recognises that because of the exceptional circumstances posed by COVID-19, some taxpayers may have difficulty paying their 2019/20 Self-Assessment (SA) liabilities on time.

Although the numbers may prove to be considerably higher than in previous years, it is not possible to make an accurate assessment of the level of interest and penalties that will be charged to SA taxpayers who do not meet the deadline of 31 January 2021 for payment of tax for tax year 2019-20.

In order to support taxpayers facing financial difficulty, HMRC have made significant changes to their online self-service Time to Pay Service, enabling taxpayers to set up a Direct Debit instalment payment arrangement with HMRC without having to contact HMRC beforehand.

Where a taxpayer does this within 30 days of the 31 January deadline they will not have to pay a late payment penalty as long as they keep to the terms of the Time To Pay agreement. However, late payment interest will still be payable on any amounts which remain unpaid after the 31 January due date.

A late payment penalty will not be payable if a taxpayer has a reasonable excuse for not paying their tax on time. HMRC will consider the impact of coronavirus as a reasonable excuse for missing return deadlines.

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