Self-assessment, delays to UTRs and the 31 January 2022 deadline

Over recent months we have received a lot of complaints from members about significant delays by HMRC in registering individuals for self-assessment. Following discussions with HMRC, they have advised that they are progressing through their postal backlog and hope to have worked through the outstanding self-assessment registrations by the end of December. HMRC have also asked us to remind agents that UTRs can be issued within 10 working days where the original application is made online. (For clients who are registering for any reason other than self-employment, an agent can use their agent credentials to access and complete the online SA1 on their client’s behalf.)

Where you have clients whose filings have been held up by delays to their registration, this article recaps what extensions might be available to the usual 31 January deadline.  These will depend upon when registration was completed, and when the notice to file was received.

Registration completed by 5 October 2021, notice to file received by 31 October 2021

In these cases, the usual 31 January 2022 deadline applies both for 2020-21 electronic returns and for payment.

Registration completed by 5 October 2021, but notice to file not received until after 31 October 2021.

Where an individual registered for 2020-21 by the 5 October 2021 deadline but HMRC do not issue them with a UTR until after the end of October, HMRC will allow more time both for filing and paying the tax due.

In these cases, the individual must file their return (electronically or on paper) within three months from the date of issue of the notice to file (TMA 1970, s 8(1G)).

The individual will also get three months to pay from the date of issue of the notice to file. (TMA 1970, s 59B(3))

Registration completed after 5 October 2021 and notice to file not received until after 31 October 2021

Here the position is trickier, as while HMRC will still give the individual three months from the date of issue to file either on paper or electronically, the individual does not get the same extension to the payment deadline. They are at risk of both late registration penalties and late payment penalties if they do not pay by 31 January 2022.

To avoid late registration penalties, the individual either needs to have a reasonable excuse for their late registration or they need to pay their outstanding tax by 31 January 2022. This may mean paying their tax before filing their return and it may be necessary to estimate the amount due.

Clearly paying an amount of tax by 31 January 2022 will also remove (if paid in full) or reduce (in the case of a lower payment) the risk of late payment penalties and interest at the same time, and is the best approach where possible. Certainly, the taxpayer should try to pay before 2 March 2022, to avoid the 5% late payment surcharge.

A key challenge with this approach is how to pay when the taxpayer doesn’t yet have a UTR.

How to pay tax without a UTR

HMRC’s guidance on paying tax does not specifically cover how an individual should pay without a UTR and it is not possible to pay online or via a bank without a UTR. However, it is possible to make a payment if the individual has a National Insurance number (NINO), by generating a payslip and including NINO details, and sending it with a cheque to HMRC. The process to follow (including HMRC’s postal address) is found here on GOV.UK.

Initially, HMRC will post the cheque to their suspense account. To ensure that the cheque can be subsequently allocated, the taxpayer might want to consider adding the following details to the back of their cheque:

  • Full name
  • Full address
  • Telephone number
  • NINO
  • Note of the type of tax and the period to which the payment relates

It would be wise to take a copy of the cheque (front and back) and keep a record of when it was sent to help in subsequent tracing by HMRC.

Once the UTR has been received (and the return filed) it will be necessary to contact HMRC to ensure that the payment is correctly allocated to the taxpayer’s account. It might help to provide HMRC with a copy of the cheque at that stage to assist tracing.