In light of the recent increased pressures on taxpayers, HM Revenue & Customs (HMRC) has extended the time for Self Assessment customers to pay tax owed without facing an additional surcharge.
Self Assessment customers will now have until 1 April 2022 to pay all of the tax owed from the 2020-21 tax year, before the surcharge (equivalent to five per cent of the outstanding debt) is applied.
There are several options to pay the debt – this could be through direct debit, online banking, or via cheque.
Alternatively, there is the option to set up a Time to Pay arrangement to spread the payments over monthly instalments to HMRC.
For individuals that owe less than £30,000, they will be able to set this up online, or if the debt amounts to more than £30,000, they will be required to contact HMRC directly.
In ordinary circumstances, any Self Assessment tax for 2020-21 would incur the surcharge from 2 March 2021.
However, due the impact of the pandemic, HMRC decided to delay this.
The extension was brought in to help taxpayers and agents that may have experienced difficulties with meeting the normal deadline.
Despite the extension before the surcharge is incurred, it is important to note that any late payments will still be liable for the normal rate of interest, which will be charged from 1 February 2022.
Whilst the delay gives taxpayers more time to clear any outstanding debt, Self Assessment taxpayers should ensure that they meet the 1 April 2022 deadline or utilise the Time to Pay facilities if necessary.
If you require support with related matters, contact our experts today.