HMRC has acknowledged the ongoing pressure on taxpayers arising from the coronavirus pandemic and the knock-on effect it is having on self-assessment filing. It is estimated that over 5 million tax returns are due to be filed this month ahead of the 31 January deadline. To ease the pressure, HMRC has announced that no automatic penalty for a late return will be issued as long as the filing is made by 28 February. Additionally, no late payment penalty will apply if payment is made in full by 1 April (or the taxpayer agrees a payment plan before that date).

Care is needed where the taxpayer is self-employed - especially if 2020/21 is the first year of trading. Class 2 NI is collected via self-assessment but administered by a separate department. Late payment of the modest liability can put entitlement to certain welfare payments at risk. Taxpayers should contact HMRC to make a separate payment to avoid problems.