Self-assessment taxpayers who pay their tax or set up a payment plan by April 1 won’t be charged a 5% late fee. But taxpayers are still urged to settle any outstanding amount as soon as possible, as you’re still charged interest. Normally, a 5% late payment penalty is charged on any unpaid tax that is still outstanding after 30 days. After this, you get charged another 5% of what you owe at six months, and another 5% again at 12 months. But because of the coronavirus pandemic, HMRC has agreed to waive the 5% payment penalty charged on unpaid tax that is still outstanding on 3 March, as long as you pay or set up payment plan by 11.59pm on April 1. A 5% late payment penalty fee will still be charged after 1 April, and again at six months and 12 months. Those who can’t afford to pay their tax bill in one lump can choose to spread their payments across monthly instalments through “Time to Pay” on the HMRC website. But again, you should be aware that interest worth 2.6% will still accrue on any outstanding payments, even if you’ve set up a plan.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of February 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.