Pay your tax before 3 March: Avoid a 5% penalty
27th February 2023
If you owed tax for the 2021/22 tax year, which should have been paid by 31 January 2023, and some or all of this is still outstanding, then HMRC will charge a penalty if:
- They do not receive payment by midnight at the end of 2 March 2023
and
- you do not agree a Time to Pay arrangement with HMRC for all unpaid 2021/22 amounts by midnight at the end of 2 March 2023.
The first late payment penalty is calculated at 5% of the tax still outstanding on 3 March 2023.
For the 2019/20 and 2020/21 tax years, HMRC relaxed the rules and agreed no initial penalty would be charged if the tax was paid in full on or before 1 April 2021 and 1 April 2022 respectively.
At the time of writing, no such relaxation has been announced for 2021/22. You should therefore arrange to make payment as soon as possible, if you have not already done so, particularly as HMRC’s rate of interest on late payment is 6.5% per year from 21 February 2023!
If you require any assistance with your tax affairs, then please call one of our offices or speak to your usual contact at Whitings.
Disclaimer - All information in this post was correct at time of writing.
