HMRC’s decision to waive Self-Assessment late payment penalties is a “lifeline to taxpayers”, according to accountancy firm Lamont Pridmore
The tax authority had previously announced that it would waive the 5% late payment penalty that usually applies from 3 March 2021 for taxpayers who pay or set up a payment plan by 1 April 2021.
Under the latest support measure, Self-Assessment taxpayers who are unable to pay all the tax that they owe can create a self-serve Time to Pay arrangement online, as long as their debt is £30,000 or less.
This will allow taxpayers who currently owe the chance to pay in instalments over the next year until January 2022.
Speaking about the latest financial support from the government, Graham Lamont, managing partner, said: “It is great that taxpayers are being given the support they need during these difficult times. We are encouraging people in Cumbria and beyond to take action now on this offer if they are struggling to pay the taxes they owe.
“By paying in instalments, it should relieve the financial pressure at a time when many incomes have been adversely affected.Many people have deferred tax payments from previous periods in 2020, which is why the tax owed by many individuals is even greater this year.”
However, Lamont added that while penalties may have been waived for now, interest would continue to “accrue” on outstanding Self-Assessment tax payments, which is why taxpayers must try to pay the tax due “as soon as possible” using the new arrangements available.
Karl Burrell, managing director at Lamont Pridmore’s Kendal, added: “The waiving of fines on tax late payment comes after similar moves for the late filing of tax returns last month, which gave taxpayers longer to complete the Self-Assessment process.
“While this was useful, taxpayers need to make sure that they file their online Self-Assessment tax return before 28 February to avoid an automatic £100 penalty.”