Self-assessment taxpayers given more time to avoid 5% late payment penalty

Self-assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by April 1, HM Revenue and Customs (HMRC) has announced.

The payment deadline for self-assessment each year is January 31.

Interest is charged from February 1 on money still owed – and normally a 5% late payment penalty also kicks in on any unpaid tax that is still outstanding on March 3.

But this year, due to the impact of the coronavirus pandemic, taxpayers are being given more time before the penalty would apply.

They need to have paid their tax bill or set up a monthly payment plan online at gov.uk by the end of the day on April 1 to avoid being charged the late payment penalty.

More than 97,260 people have so far set up a “time to pay” arrangement online.

Jim Harra, HMRC’s chief executive, said: “Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at gov.uk to help anyone struggling to meet their obligations.”

Self-assessment taxpayers who have yet to file their 2019-20 tax return should file by February 28 to prevent being charged a late filing penalty of £100.

HMRC said taxpayers should still try to pay in full if they can, to stop interest accruing.