Millions of people have been given financial breathing space after HM Revenue and Customs effectively extended the tax self-assessment deadline by a month, until 28 February. HMRC is postponing late-payment penalties for self-assessment taxpayers until 1 April because it “recognises the pressure” individuals and businesses are facing because of Covid-19. The move – a repeat of concessions made last year – is good news for the estimated 5.7 million people who have still not filed their 2020-21 tax return. Almost 6.5 million people have already done so. The official deadline for completing a return is 31 January, after which a £100 late-filing penalty would be automatically imposed. HMRC said the deadline to file a return and pay any due tax was still 31 January, but it was waiving late-filing penalties for one month to give more time to taxpayers and accountants who might be struggling. As a result, those who file late will not be hit with a penalty, provided their return is submitted by 28 February. In addition, anyone who cannot pay their self-assessment tax by the deadline will not face a late-payment penalty, provided they pay in full or set up a so-called “time to pay” arrangement – which lets people spread their payments – by 1 April. Normally a 5% late-payment penalty is charged on any unpaid tax that is still outstanding on 3 March. But HMRC said interest would be payable from 1 February, as usual, “so it is still better to pay on time if possible”. Dawn Register, head of tax dispute resolution at the accountant BDO, said: “This is a very welcome move by HMRC … This will be a huge relief to those facing tax bills alongside other household debts in January. “HMRC clearly understands that those severely impacted by Covid-19 should not face receiving a ‘brown envelope’ in February as it would result in unnecessary angst.” Kevin Sefton at tax app Untied said: “The current Covid wave will be affecting not just those who need to file, but accountants and others supporting the 51% of filers who use an adviser, and HMRC themselves.”