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Nearly 2.3 million people failed to file their self-assessment tax returns for the 2020/21 tax year before a less stringent deadline of 31 January 2022.

More than 12.2m taxpayers, including the self-employed and those with more than one source of income, had to submit self-assessment forms.

The vast majority did so online on or before the deadline at midnight on 31 January 2022, although there was an earlier deadline for paper returns.

Figures from HMRC said that 10.2m filed their 2020/21 tax returns on time, including more than 630,000 on deadline day itself.

By comparison, the number of taxpayers who beat this week's filing deadline was down from the 10.7m self-assessors last year.

Three days before the latest 31 January deadline, HMRC said 3.5 million (29%) taxpayers had yet to file their self-assessment tax returns.

Campaigners have also warned taxpayers that fraudsters are using the deadline as a "smokescreen" to steal money.

Late-filing penalties on hold

Anyone who missed last month's self-assessment deadline has until 28 February 2022 to file their tax returns online before being fined.

HMRC said last month that fines would not be enforced on taxpayers who missed the 2020/21 deadline at midnight on 31 January 2022.

The tax authority said COVID-19 had piled added pressure on individuals and tax advisers to beat the original deadline for online submissions.

It is the second successive tax year that such a decision has been taken on self-assessment penalties, due to the pandemic.

Angela MacDonald, deputy chief executive at HMRC, said:

"We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19.

"Waiving penalties for one month gives self-assessment taxpayers extra time to meet their obligations."

What late penalties will you pay now?

While late-filing penalties won't be levied throughout February, there is a penalty of sorts for not filing your tax return or paying you liability on time.

From 1 February 2022, interest is being charged at 2.75% on the tax you owe - but this will increase over time.

If you don't file a tax return online on or before midnight on 28 February 2022, the penalties regime will operate as usual from 1 March 2022.

That means filing just a day later, on 1 March 2022, could result in you receiving an instant £100 penalty.
What you owe after will gradually increase as follows:

  • up to three months late - £10 daily fine (for up to 90 days), on top of the initial £100 fine
  • six months late - a further £300 or 5% of the tax owed, whichever is higher
  • 12 months late - an additional £300, or 5% of the tax owed, whichever is higher.

Time-to-pay arrangements

Anyone who could not pay their tax bill by 31 January 2022 has until 1 April 2022 to either pay their tax in full, or set up a time-to-pay arrangement.

These arrangements spread the cost of repaying tax bills of up to £30,000, usually over a period of up to 12 months.

A 5% late-payment penalty will be charged if tax is not paid or a payment plan has not been set up by midnight on 1 April 2022.

Further 5% late-payment penalties will apply at the usual six and 12-month points on tax outstanding where a payment plan has not been set up.

We can advise on any aspect of self-assessment.