Those with outstanding self assessment tax returns can breathe a sigh of relief as HMRC announced today that they won’t issue late filing penalties if self assessment taxpayers file their returns by the 28th of February. Normally, those who file late would receive an automatic late filing penalty if they miss the 31st of January. However, HMRC have acknowledged the challenges on us all and given the extra month grace.
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 31 January.
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.
What about paying by the 31st of January?
HMRC are clear that taxpayers are still obliged to pay their tax by the 31st of January. So those who file late, whilst avoiding late filing penalties, will incur interest on amounts overdue after the 31st. Clearly this means there is still incentive to get your tax return filed by the 31st. But for those who are struggling after the fallout of 2020, you won’t need to worry about appealing penalties with a reasonable excuse.
Struggling to pay by the 31st?
For those who have suffered financial hardship owing to COVID-19, there are still options for you. You can contact HMRC and arrange for a time to pay arrangement and pay your tax over installments. Read our COVID-19 guide for more on this and other options available to taxpayers. You should do this before the 31st of January.
Better late than never
Clearly this is better news than if nothing had been announced. For those who have struggled to get their affairs in order, the anxiety of the 31st has been lifted. They need not worry about spending time appealing, or paying a £100 penalty. But with interest being charged after the 31st, there’s all the incentive to get things over the line in the next few days.
The timing really won’t offer much relief to those who have struggled and already submitted their taxes. With six days left, it’s incredibly short notice for accountants and clients to plan and manage their workload.
We still encourage self assessment taxpayers to get their taxes done by 31st of January to avoid unnecessary interest.
If you need support on your taxes, get in touch today to see how we can help.