The word ‘extension’ is misleading as the deadline is still midnight on the 31st of January 2022. Any filings after that date are considered to be late. However, there is no fixed £100 fee for submissions in February. There will, however, be an extended inquiry window until the 30th of April 2023 and not the 31st of January 2023. Your amendment window remains as 12 months from the date of filing.
You will need to consider your letter of engagement that you have in place with your clients and their own particular deadlines that you have set in order to file their returns on time. If, for instance, you have a few staff members who are off sick or isolating and won’t be able to file for their clients before 31 January you may want to make use of this extension. However, you will need to open the dialogue with your clients about the costs and the various knock-on effects that filing late will result in.
The extension does not come without cost. From the 31st of January each late return will start to incur interest which, as of the 4th of January, is now 2.75%. If you want to avoid paying interest, you will need to file your return on time.
Regarding late payment surcharge, there will be a 5% surcharge if the balance of the 2021 tax is not paid by the 1st of April 2022 (this has been extended from the usual 1st of March deadline). This surcharge will be due, along with the interest accrued.
With the information above, it’s clear that this “extension” doesn’t mean kick back and take your time to file. By filing after the 31st of January, your submission is still late and so we advise that every effort is made to file on time.
Looking to find out more about the tax filing extension or other issues relating to tax? Have a search through our website for more.