January concessions

HMRC has announced that where 2021 tax returns are filed before the end of February 2021, no £100 late filing penalty will be charged.

Late-paid tax is still subject to interest – the current rate is 2.75% per annum. However no extra late payment penalties will be charged this year where tax is fully paid by the end of March, or where a ‘time to pay’ arrangement has been set up by then.

As last year, this is a pragmatic step, which not only helps taxpayers whose time and finances have been impacted by the Covid situation, but will also save HMRC having to process a huge volume of February late-penalty appeals.

No concession has been announced for VAT returns. Returns for the quarter ended 31 December 2021 are due with payment by 7 February.

Where any taxpayer’s return is delayed beyond the end of February, or a VAT return is late, for personal reasons – whether related to the pandemic or not – it will still be possible to appeal a late penalty in the usual way, asking HMRC to consider the circumstances and decide whether they will waive the penalty.