Readers are reminded that taxpayers have until 1 April 2022, which is in just a few days’ time, to pay their outstanding 2021/22 self-assessment (“SA”) tax bill or set up a Time to Pay arrangement to avoid receiving a 5 per cent late payment penalty. However note that the late payment penalty only applies to the balancing payment due on 31 January 2022 and not to payments on account.
Interest accrues as normal, beginning on 1 February 2022. On 21 February 2022, the rate of interest increased from 2.75 per cent to 3 per cent. The rate of interest is due to increase again to 3.25 per cent from 5 April 2022 as a result of the Bank of England’s recent decision to increase the base rate.
Time to Pay allows those who need it the option to spread their tax payments over time. SA taxpayers with up to £30,000 of tax debt can do this online once they have filed their return; this was a recommendation of Chartered Accountants Ireland in its “The Next Financial Year 2020” position paper. If a taxpayer owes more than £30,000, or needs longer to pay, they should call the SA Payment Helpline on 0300 200 3822.
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