2019/20 Tax Year – Late Payment 5% Surcharge Delayed to 1 April

The government has announced that, due to COVID-19, the 5% late payment surcharge which would normally be charged on payments made more than 30 days late will now only be charged on 2019/20 balancing payments made after 1 April 2021.

The due date for payment of the 2019/20 balancing payment is 31 January 2021 and under normal circumstances, HMRC would charge a 5% surcharge on any amount not paid by 2 March 2021.

However, HMRC has extended the deadline to 1 April 2021.

This means that, to avoid the 5% surcharge, taxpayers will need to either pay their 2019/20 balancing payment in full by 1 April 2021 or will need to have set up a ‘Time to Pay’ arrangement with HMRC to avoid the charge.

You can set up a ‘Time to Pay’ arrangement using the link to HMRC shown below. To be eligible to set up this arrangement you must:

  • Owe £30,000 or less.
  • Not have any other payment plans or debts with HMRC.
  • Have your tax returns up to date.

You must also set up the ‘Time to Pay’ arrangement less than 60 days after the payment deadline. (i.e. by 1 April)

If you are unable to use the online services, you can call HMRC on 0300 200 3835 and set up the ‘Time to Pay’ arrangement over the phone.

Before you call you should ensure that you have your Unique Taxpayer Reference (UTR) number to hand along with your bank details to allow you to set up a direct debit for your arrangement.

It should be noted that there has been no change to the due date for payment of the 2019/20 balancing payment or the first 2020/21 payment on account. This means that interest at an annual rate of 2.6% will still be charged from 31 January 2021 until the tax is paid, in addition to any late payment surcharges.

2019/20 Revised Dates
31 January 2021Payment due date
1 February 2021 Interest starts accruing on the amount outstanding.
1 April 2021Last date to pay outstanding tax or make a ‘Time to pay’ arrangement to avoid 5% penalty.

Contact us

For further information, please contact Glen Thompson (glen.thompson@taitwalker.co.uk) or your usual MHA Tait Walker contact.