Almost 1.8m people have missed the January deadline to submit their self assessment tax return and are now incurring interest on the outstanding balance, according to HM Revenue and Customs.
Figures from the tax authority, published yesterday (February 1), showed 10.7m people submitted their 2019/20 tax returns by the January 31 deadline.
About 1.8m had failed to do so but will not be charged a late filing penalty provided they submit their return online by February 28.
The deadline was extended last week following lobbying by accountants and the tax profession.
However, those who did not pay their bill by the January deadline will incur interest of 2.6 per cent on the outstanding balance and have been urged to pay up as soon as possible.
If the tax remains outstanding and a payment plan has not been set up before March 3 then a 5 per cent late payment penalty will be charged.
Further penalties are charged at six and 12 months on any tax still outstanding.
The tax authority attributed the number of people missing the deadline to the impact of the coronavirus pandemic.
Karl Khan, HMRC’s interim director general for customer services, said: “We know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic.
“Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.”
Dawn Register, head of tax dispute resolution at BDO, urged people to “not bury their head in the sand”.
Ms Register said: “HMRC will need to know what payments are due before agreeing a ‘Time to Pay’ arrangement, which means that you must file your return first.”
A Time to Pay arrangement can be set up online where less than £30,000 is owed.
If the debt is more than £30,000, the individual will have to contact HMRC to set up a tailored agreement.
Ms Register added: “The key message is that for people who missed 31 January filing they really should try to file in February and before the next penalty deadline of 28 of February.”
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