Many self-employed estate agents who have not yet filed their tax return will be delighted that the traditional 31 January deadline has been extended until 28 February. But taxpayers are being reminded that there is a crucial ‘sting in the tail’ that they must be aware of.
To be clear, anyone who cannot file their return by the close of play today will not receive a late filing penalty – they are able to file online by 28 February without a penalty. But taxpayers are being encouraged to pay what they owe to HMRC today, and file their tax return, if possible, despite the deadline being extended until the end of next month.
Robert Salter, a tax services director at Blick Rothenberg, said: “The extended deadline ensures that taxpayers avoid needless penalties and gives them extra time needed to gather missing data, which may have been difficult to gather during the pandemic.”
Robert Salter
“However, the sting in the tail is that the today’s deadline of January 31st is still important, and payments should still be made.”
“Taxpayers will be left with a surprise in relation to interest and surcharges for late payment of tax if they wrongly believe the extension also applies to paying their tax. HMRC requirement today and any late paid amounts will attract daily interest at 2.75%, annualized rate, and a 5% surcharge if not paid by 2 March.”
Additionally, even though tax returns filed by 28 February will not be late for basic late payment penalties, in other ways, the tax return will still be ‘late’, which can mean, for example, that the deadline for HMRC to raise an enquiry into the tax return is automatically extended.
Salter added: “I would recommend that taxpayers file their returns today 31st January, if they have all the information required. Even where it is not possible to file the tax return by this date, there may be some benefit for those taxpayers who are expecting a significant tax liability on their tax returns e.g., because of capital gains or other income which isn’t subject to any withholding taxes, to make an estimated payment today to minimise any interest charges which might otherwise be due.”