Self assessment tax will not be subject to a late penalty until later in the year after HMRC announced it would waive the late penalty for money not paid before April. The move will benefit millions of freelancers up and down the country who have not yet completed their tax return.
The original deadline has been extended to February 28, but this has now been pushed back even further into 2021.
The move is to relieve freelance workers amid the pressure of the coronavirus pandemic, which has naturally had a serious negative impact on many peoples work.
HMRC is expecting some 12.1 million people to complete a self assessment tax return this year.
The service disclosed that 8.9 million had already filed theirs in late January – meaning some 3.2 million individuals could still be left to do so.
HMRC said taxpayers should still try to pay in full if they can, to stop interest accruing.
Under current coronavirus support measures, self employed workers can claim on the Self-Employed Income Support Scheme, which is similar to the furlough scheme designed for those on PAYE.
Self employed individuals can claim 80 percent of their trading profits, up to a maximum of £7,500.
The Treasury has confirmed that there is a fourth SEISS payment, stretching from February until April 2021.
The Chancellor is expected to map out details for the future of the SEISS grant during his Budget, due to take place on March 3, and whether there will be any extension to the scheme.
A HM Treasury spokesperson said: “We have invested more than £280billion throughout the pandemic to protect millions of jobs and businesses.
“And we have extended our self employed and furlough schemes through to April so that people have certainty that help is in place.
“At the upcoming Budget, we will outline the next stages of our Plan for Jobs to support businesses and families across the UK.
“That has been our priority throughout the past year and it will be the priority for the year to come.”