UK’s HM Tax & Customs has waived filing and late filing penalties for self-assessed taxpayers for an extra month, to support those already struggling with the pressures of the pandemic.
The decision came as HMRC revealed that of the 12.2 million taxpayers who needed to file a tax return by January 31, only 6.5 million did.
“We know the pressures individuals and businesses are facing this year due to the impact of Covid-19,” said Angela MacDonald, HMRC Deputy Executive Director.
“Our decision to waive the penalty for a month for self-assessed taxpayers will give them more time to meet their obligations without worrying about penalties.”
Although the filing and payment deadlines are still January 31, late penalties will not apply if the tax return is filed online before February 28. Late filing penalties will not apply. applicable if tax is paid by April 1st.
The same period also applies to setting up a Pay Time arrangement, which allows taxpayers to split £30,000 or less in 12 monthly installments.
However, the January 31 deadline applies for all other purposes, said Nimesh Shah, managing director at tax and consulting firm Blick Rothenberg.
He warned: “HMRC will still want to tax and any late payment will be charged daily interest at 2.75% and a 5% surcharge if not paid by April 1st (i.e. a month compared to normal).
He added that missing the deadline could have other implications, such as an extension of the deadline HMRC must launch an investigation, and some claims and elections must also be filed in advance. January 31st.
This is only the second time the government has made such a move, following a decision last year after lobbying by accounting and tax experts who argued they would struggle to meet deadlines due to the impact of Covid.
In a normal year, failure to file a tax return on time will result in a £100 charge, with other fees if the delay is three months or longer.
A record of 1.8 million people miss the deadline of January 31 last year after HMRC announced they were temporarily free, almost double the 2020 total.
Shah said a repeat is unexpected as disruptions have been more limited than in 2021. “HMRC may be more concerned by the number of earnings yet to be announced and the pressure to extend the timeframe. as the deadline draws nearer.”
The move has been welcomed by the Institute of Chartered Accountants in England and Wales. “We have urged HMRC to give taxpayers and their agents more time to self-assess, so we are pleased that this decision will help everyone and tax agents who are dealing with it,” said Frank Haskew. with the ongoing disruption caused by Covid-19. head of tax strategy at ICAEW.
“This will be a huge relief for those facing tax bills,” said Dawn Register, head of tax dispute resolution at BDO, the UK’s fifth-largest accounting firm. , along with other household debts in January.
Under normal circumstances, taxpayers would have to appeal to HMRC citing “reasonable cause” for their delay, the Register said, an open process for interpretation.
HMRC says more than 45,000 tax returns were filed during New Year’s Eve and New Year’s Day.
