HMRC to waive late payment fines for those who file self-assessment tax returns by 28 February

The extension means you won't now face the usual £100 fine so long as you file your tax return online by 11.59pm on 28 February. You may also be able to file after this deadline and avoid fines if you're delayed due to a coronavirus-related problem - though HMRC won't confirm exactly what scenarios this might apply to in practice.

But even if you delay filing your return you should still try to pay any tax owed by 11.59pm on 31 January as this deadline hasn't been extended. If you miss it, you'll be charged interest at a rate of 2.6% on any unpaid tax from 1 February, plus additional penalties - though these won't kick in until 30 days after the 31 January deadline.

See our Coronavirus Self-Employed and Small Limited Company Help guide for more info on what you can do to boost your finances in light of the pandemic.

Self-employed workers and high earners need to file self-assessment tax returns

Most UK taxpayers have their taxes deducted automatically from their wages, pensions or savings, and won't need to file a tax return. But tax returns are due from individuals or businesses who haven't had tax automatically deducted, or who have earned extra untaxed income.

You'll need to submit a tax return if any of the following applied to you in the 2019/20 tax year:

• You were self-employed and your income was more than £1,000.

• Your income was more than £50,000, and you or your partner claimed child benefit.

• You earned more than £2,500 from renting out property, or from other untaxed income such as tips or commission.

• You earned more than £100,000 in taxable income.

• You earned £10,000 or more before tax from savings, investments, shares or dividends.

• You earned income from abroad, or lived abroad and had a UK income.

• You need to pay capital gains tax.

• You received income from a trust.

• Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016).

• HMRC has told you that you didn't pay enough tax last year (and you haven't already paid up through your tax code or voluntary payments).

• You filed a self-assessment tax return last year (even if you didn't owe any tax). You'll need to do this unless HMRC has already written to you to say you don't need to file one.

You need to register to file your tax return online

The deadline to register for a self-assessment tax return was technically 5 October 2020 – but generally you'll be OK if you register now. It's crucial you register ASAP though, as it can take up to 10 working days for you to receive your reference number.

If this is your first time filing a return, you can register by visiting the HMRC website.

HMRC will then set up your self-assessment online account and send you a letter with your unique taxpayer reference – a 10-digit code which you'll need the first time you log in.

If it's your first time filing online but you already have a reference number – for example, because you've previously filed a paper return – you should be able to skip this step and just register for the online service.

You can retrieve forgotten login/password details via Gov.uk

You'll need to log into your self-assessment account with your Government Gateway ID or using Gov.uk Verify.

• Forgotten your Government Gateway details? You can retrieve your user ID or reset your password online.

• Forgotten your Gov.uk Verify details? You'll need to use the forgotten username or password function of the provider which has verified your identity. See Gov.uk for more.

If you're signing into your self-assessment account for the first time and have forgotten your unique taxpayer reference number, you should be able to find it on previous tax returns or on other documents from HMRC, such as payment reminders. It's also available on your HMRC online account.

If you can't find your unique reference, you can phone the self-assessment helpline on 0300 200 3310.

The paper filing deadline has now past

The deadline for filing paper returns was 31 October 2020 – so you must file your return online to avoid paying a penalty. If you were to file a paper return now you would be fined.

It's not just your return you need to file - you also need to pay your tax bill

It's not just tax returns that need to be filed by 31 January 2021. If you were due to make an 'on account' (ie, advance) payment by 31 July 2020 – and not everyone has to – the Government gave you an extra six months to pay, but that runs out on 31 January 2021 so you need to pay unless you've agreed a separate repayment plan with HMRC. This payment is meant to cover roughly half of your 2019/20 bill and is calculated by using half of your actual bill for the 2018/19 tax year.

You'll also need to pay any remaining tax owed from the 2019/20 tax year (known as a balancing payment) – unless you've also agreed a repayment plan – as well as make your first payment on account for the 2020/21 tax year. Crucially, miss these payments and you'll be fined and charged interest. 

You can pay your tax bill by bank transfer, debit card or cheque. You can also pay at your bank or building society if you have a paying-in slip from HMRC.

HMRC accepts money under the Faster Payments system, which allows cash to go through in two hours. However, each bank has a limit on how much you can transfer under Faster Payments. The limits range from £5,000 to £100,000. See each provider's limit. You can no longer pay the bill using a personal credit card or at the post office.

Speak to HMRC urgently if you can't afford to pay the tax

If your bill is correct but you find you can't afford it, contact HMRC as soon as possible, as you may be able to avoid late payment penalties by coming to an arrangement to spread your payments over a period of time – see below for more on this. (Also see our Free Tax Code Calculator to ensure you're on the right tax code).

You'll need a reasonable excuse for not paying your tax on time. This is usually something unexpected or outside your control that stopped you meeting a tax obligation. For example:

• Your partner or another close relative died shortly before the tax return or payment deadline.

• You had an unexpected stay in hospital that prevented you from dealing with your tax affairs.

• You had a serious or life-threatening illness.

• Your computer or software failed just before or while you were preparing your online return.

• Issues with HMRC's online services.

• A fire, flood or theft prevented you from completing your tax return.

You can sign up to a repayment plan if you're struggling - but interest is charged

Those who owe tax of less than £30,000 (and more than £32) in January 2021 (so that'd be the deferred July payment and January 2021's 'on account' payment) have been able to use HMRC's 'Enhanced Time to Pay' mechanism to agree a repayment plan to spread that tax bill and repay it by direct debit over up to 12 months – even if that goes beyond the 31 January 2021 payment deadline.

To use this service, you need to have filed your 2019/20 tax return by the 31 January 2021 deadline - we've asked HMRC if this deadline has also now been extended until 28 February 2021 and we'll update this story when we know more.

You also need to set up the repayment plan no later than 60 days after the due date of a debt. In addition, you need to have no outstanding tax returns, other tax debts or other payment plans set up. You can set up a Time to Pay plan online through your tax account, or you can call HMRC on 0300 200 3822 (open Monday to Friday, 8am to 4pm).

However, bear in mind that those who use this system will pay simple interest (meaning it doesn't compound) of 2.6% a year from 1 February 2021 until their bill has been repaid in full.

You face penalties if you miss both the filing and payment deadlines

You'll be charged a £100 penalty if you fail to submit your return by the filing deadline – even if there's no tax to pay. Further penalties of £10 a day are applied after three months, up to a maximum of £900. After six months, you'll get a further penalty of 5% of the tax owed or £300 (whichever is greater), which is repeated at 12 months.

There are also extra penalties for paying the tax late. If you don't pay on time, you'll be charged interest straightaway. You'll then be fined 5% of the unpaid tax after 30 days, plus 5% after six months and again after 12 months. So if you miss the 31 January 2021 payment deadline, sort it as soon as you can.

The Government provides an online tool for calculating how much you'll need to pay in penalties and interest if you miss the deadlines.

Who should I contact for further advice?

The Government provides help sheets and videos for guidance on submitting your tax return.

You can also contact HMRC for advice directly by calling the helpline on 0300 200 3310. It's open from 8am to 8pm on weekdays, 8am to 4pm on Saturdays and 9am to 5pm on Sundays. You can also get general help from HMRC customer support on Twitter.