The deadline for 2019-20 self-assessment returns is January 31, 2021. Normally, a return filed after this date would attract an automatic £100 late-filing penalty. However, HMRC have announced that they will waive this penalty – provided that returns are filed electronically on or before February 28 2021.
HMRC are still encouraging tax payers to file by the end of January if possible, and taxpayers are still obliged to pay their bill by January 31. Interest will be charged from February 1 on any outstanding liabilities.
Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before setting up a time to pay arrangement, so HMRC is encouraging everyone to do this as soon as possible.
HMRC’s Chief Executive, Jim Harra, said: "We want to encourage as many people as possible to file their return on time, so we can calculate their tax bill and help them if they can’t pay it straight away.
"But we recognise the immense pressure that many people are facing in these unprecedented times and it has become increasingly clear that some people will not be able to file their return by January 31.
"Not charging late filing penalties for late online tax returns submitted in February will give them the breathing space they need to complete and file their returns, without worrying about receiving a penalty. We can reasonably assume most of these people will have a valid reason for filing late, caused by the pandemic."
Normally, late filing penalties are applied to all returns filed after the January 31 deadline. Those penalties are cancelled if the customer has a reasonable excuse for filing late. However, this year HMRC is not issuing late filing penalties for a month to help taxpayers and agents who are unable to meet the deadline.
HMRC has previously said that it was keeping the situation closely under review. It has become increasingly clear from the filing rate that some taxpayers and agents cannot file on time, and the department has now determined that ensuring no customers will receive late filing penalties if they file online before the end of February is the best way to help them.
The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) welcomed the announcement from HMRC and said that the change mirrors the request from the CIOT and ATT, and other bodies, for leniency given the difficulties faced by agents and taxpayers as a result of the pandemic.
These problems were enhanced when the latest lockdown was introduced this month. While HMRC had always said that taxpayers issued with late-filing penalties would have their penalties quashed where they had been unable to file on time due to coronavirus, appealing penalties would have meant more work for agents, taxpayers and HMRC.
John Barnett from CIOT said: “We are pleased that HMRC are implementing our recommendation not to issue late-filing penalties for self-assessments returns filed before March 1 2021, but it remains important that anyone who can file their return on time by January 31 2021 does so. This is a relaxation on the first late-filing penalty only. Taxpayers are still expected to pay their tax by January 31 2021, even if only an estimated figure, to avoid interest accruing.”
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Susie Hughes © Shout99 2021