Late Payment Penalty – Don’t get caught out!
The payment deadline for the second payment on account for 2020/21 is 31 July 2021. Failure to meet this deadline will result in interest being charged at the rate of 2.6% by HMRC from 1 August 2021 until the outstanding amounts are settled.
Given the current situation many taxpayers may also have tax outstanding from 31 January 2021 in relation to both the 2019/20 balancing payment and the first payment on account for 2020/21. If there is an amount outstanding in relation to 2019/20 then a further late payment penalty of 5% will accrue on any amount not settled before 1 August 2021, this is despite the previous late payment penalty deadline being pushed back to 1 April 2021.
It is important that any clients with tax liabilities outstanding for 2019/20 either settle these in full or enter into a time to pay arrangement with HMRC before 1 August 2021.
If outstanding liabilities are under £30,000 then time to pay arrangements can be set up with HMRC online, otherwise a call to HMRC will be necessary.
Related News Articles
Mileage Tax Relief Guide
Guide to Claiming Tax Relief on Mileage Expenses (Where Reimbursed Below HMRC Rates) Step 1: Confirm Eligibility You may claim tax relief if: - The mileage relates strictly to business travel (not ordinary commuting). - You are using your own vehicle. - Your employer reimburses you below the HMRC Approved Mileage Allowance Payments (AMAP): -…
Government to Raise Income Threshold for Self-Assessment Reporting and Launch Simple Online Tax Payment System
Move expected to reduce administrative burdens for up to 300,000 taxpayers The Government has announced its intention to raise the income threshold at which individuals are required to register for Self-Assessment. This change will affect taxpayers with low levels of trading, property, or miscellaneous income and forms part of a broader package aimed at simplifying…
Mandatory Real-Time Reporting of Benefits in Kind Delayed Until April 2027
HMRC delays mandatory payrolling of most employee benefits by one year HM Revenue & Customs (HMRC) has confirmed a 12-month delay in the implementation of mandatory real-time reporting for most benefits in kind (BiKs). Initially expected to come into force in April 2026, the requirement will now apply from April 2027. This extension follows feedback…