Tens of thousands of hard-pressed taxpayers, still recovering from the effects of the COVID-19 pandemic, have taken advantage of HM Revenue & Customs’ (HMRC) offer to pay their bill by instalments.
More than 142,000 taxpayers have used HMRC’s online Time to Pay facility to spread the cost of their Self Assessment tax bill since April 2021, HMRC has revealed.
The Self Assessment deadline for 2020/21 tax returns was 31 January, but this year HMRC gave customers until 1 April to pay any tax owed and not face penalties. They were however faced with interest payments on the outstanding amount.
Why was the extension granted?
The extension was granted to hard-pressed taxpayers who suffered loss of business or trade during lockdowns during the COVID-19 pandemic.
HMRC says it postponed late-payment penalties for self-assessment taxpayers until 1 April because it recognised individuals and businesses are facing because of Covid-19.
Customers who were unable to pay in full but had a tax bill under £30,000 could use the online Time to Pay service to spread the cost into manageable monthly instalments.
How much has been paid back in instalments?
Those who owed more than £30,000 or needed longer to pay could still use Time to Pay but they had to contact HMRC to arrange it.
Since April 2021, Self Assessment customers have used this service to pay nearly £475 million worth of tax in instalments.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “I’d like to thank the millions of customers and agents who have sent us their tax returns and paid their tax bills.”
Any Self Assessment customers who did not pay their outstanding tax by 1 April will now face a five per cent late payment penalty on any outstanding tax.
Customers wishing to file their 2021/22 tax return can do so from 6 April 2022. Last year, more than 63,500 customers filed their 2020/21 tax return on the first day of the tax year.
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