Self Assessment late payment penalty to be waived if tax paid or payment plan set up by 1 April 2021

The payment deadline for Self Assessment is 31 January and interest is charged from 1 February on any amounts outstanding. Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the COVID-19 pandemic, HMRC is giving taxpayers more time to pay or set up a payment plan.

Self Assessment taxpayers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021. Note that the payment deadline remains 31 January and interest will be charged on late payment. The current rate of late payment interest is 2.6%.

Payment plans or payments in full must be in place by midnight on 1‌‌ April to avoid a late payment penalty. You can pay your Self Assessment tax bill here.

Setting up a payment plan

The online Time to Pay facility allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

Self-serve Time to Pay allows taxpayers to set up a payment plan online for tax bills up to £30,000 and pay in monthly instalments, up to January 2022.

For Self Assessment debts which are more than £30,000, or more time is needed to pay a debt in full, the Time to Pay arrangement cannot be set up online. However, an arrangement may still be able to be set up by calling the Self Assessment Payment Helpline on 0300 200 3822.

If you need to set up a payment plan see HMRC’s website.