Due to the impact of the Covid-19 pandemic, HMRC has given self assessment taxpayers more time to pay their tax or set up a payment plan without facing a 5% late payment penalty charge, as long as arrangements are in place by midnight on 1 April 2021.
Taxpayers who have yet to settle their liabilities for the 2019 to 2020 tax year can pay their tax bill or set up a monthly payment plan online at gov.uk. Setting up a Time to Pay arrangement allows taxpayers to spread the cost of their self assessment tax bill into monthly instalments until January 2022.
Anyone worried about paying their tax and unable to set up a payment plan online as it is more than £30,000 should contact HMRC for help and support.
There is no change to the payment deadline and other obligations are not affected. This means that the payment deadline remained 31 January 2021 and interest will be charged on late payment. The current rate of late payment interest is 2.6%.
A 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2021. Further late payment penalties are charged at 6 and 12 months (August 2021 and February 2022 respectively), on tax outstanding where a payment plan has not been set up