HMRC announces there will be no late filing penalty for those who file online by 28 February
By Charlotte Barbour, Director of Taxation
25 January 2021
Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February, HM Revenue and Customs’ Chief Executive Jim Harra has announced.
Normally, late filing penalties are applied to all returns filed after the 31 January 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. Late filing penalties will not be issued for online tax returns received by 28 February.
In a letter addressed to ICAS and other professional bodies, Mr Harra explains that HMRC has seen a growing gap between forecast and actual numbers of returns coming in.
“The evidence is now suggesting that it is very likely that a larger than usual number of taxpayers will not be able to file on time, and will have a valid, Covid-related reasonable excuse for filing late.
“[HMRC has therefore] concluded that the most effective course of action is for us to assume that everyone who files by the end of February is in that position. Therefore, we will not charge late filing penalties for those who file online by 28 February.”
However, it should be noted that HMRC has not moved the filing deadline and other self-assessment obligations are unchanged, including the obligation to pay on time.
HMRC has also advised that it has increased support for customers who may need help with their tax liabilities. Once they have completed their 2019-20 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments. Customers can apply for self-serve Time to Pay via GOV.UK. Interest will be applied to any outstanding balance from 1 February 2021.
ICAS correspondence
This announcement follows requests made by ICAS on behalf of Members to automatically waive penalties for up to any three-month delay in an annual tax return filing for those due between now and 30 June 2021. We urged HMRC to waive late filing penalties in recognition that compliance with the normal filing deadlines would be difficult to achieve.
