Late Filing – Clarity from HMRC

First published on 11 January 2021 by Alastair
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Despite tightened restrictions across the UK, no decision has yet been made  to push back the 31 January tax filing deadline for self-assessment tax returns although we do understand that this is still under active consideration. 

However, HMRC has made the welcome announcement that it will accept the impact of COVID-19 as being a reasonable excuse for filing late, which will allow taxpayers to appeal a late filing penalty if they are unable to get their return  submitted on time. It is important to note that this is not an opportunity to ignore the filing deadline as HMRC will not accept ”because of COVID-19” as a blanket excuse for all late filers and each individual intending to appeal a penalty on this basis will need to explain to HMRC how they have been specifically impacted in a way that prevented them from filing.  

This means that it is very much at the discretion of HMRC whether or not to accept any individual appeal and history suggests that HMRC’s view of what is a reasonable excuse and taxpayer’s view are quite different and it could lead to additional time and costs for those trying to have a penalty reduced. For that reason, if at all possible, our recommendation on the best way to avoid a penalty is to submit your return before the deadline.  If you have been unable to gather all of the details for your return, it is possible to submit your return on a provisional basis and include a reasonable estimate for the missing figures.  You can then go back and file a final return once  you have all the details. 

As a side note, the ‘reasonable excuse’ appeal will now be available to all taxpayers. When this was first being considered, it was only going to be ‘unrepresented’ (those taxpayers without a tax adviser) who were going to be permitted this opportunity. Common sense however has prevailed and all taxpayers are, on the face of it being treated equally. 

No additional measures have been announced to help those unable to pay their tax bill, beyond the changes to the ‘Time to Pay’ arrangement that HMRC announced last year.  More details on this can be found on our article here.

Chris Leslie, Tax Senior

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