The tax liability for 2019/20 was due as normal on 31 January 2021 and after HMRC concessions due to COVID issues, taxpayers now have until the 31 March 2021 to pay or agree a payment plan with HMRC to pay any outstanding tax owed to HMRC or automatic penalties will be due as follows:
| Late payment | Penalty |
| 30 days late | 5% of tax due |
| 6 months late | a further 5% of any tax outstanding at that date |
| 12 months late | a further 5% of any tax outstanding at that date |
HMRC will also charge interest from 1st February 2021 at 2.60% on any tax owing and on the penalties and charges incurred as a result of the late payment of tax owed.
Some taxpayers may be able to make a ‘time to pay agreement’ with HMRC, which could mean that a penalty is suspended. However, the taxpayer will become liable to the penalty if the agreement is broken.
As well as late payment penalties, there are also penalties for late filing of the tax return. For the year 2019/20 only, HMRC has confirmed an extension to the filing deadline from 31 January 2021 to 28 February 2021.
Tax returns submitted by 28 February will not incur the £100 late filing penalty. Automatic penalties for filing tax returns after 28 February 2021 are as follows:
| Late filing | Penalty |
| Missed filing deadline | £100 |
| 3 months late | Daily penalty £10 per day for up to 90 days (max £900) |
| 6 months late | 5% of tax due or £300, if greater* |
| 12 months | late 5% or £300 if greater*, unless the taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due. |
If the filing is late by 12 months and the taxpayer deliberately withholds information, penalties will be based on their behaviour as follows:
- Deliberate and concealed withholding 100% of tax due, or £300 if greater.
- Deliberate but not concealed 70% of tax due or £300 if greater.
- Reductions apply for prompted and unprompted disclosures and telling, giving and helping.
* Subject to multi-penalty rule paragraph 17(3) of Sch FA 2009.
If you are concerned about meeting or having missed either deadline and fear being fined, please contact our Tax team – tax@cogentaccountants.co.uk – to see how we can help.