Fines scrapped for missing self assessment tax deadline – for a month

HMRC has announced that self assessment taxpayers will not be fined for filing their 2019-20 return late – as long as they file online by February 28.

More than 8.9 million have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by January 31, if possible.

Taxpayers are still obliged to pay their bill by January 31 and interest will be charged from February 1 on any outstanding liabilities.

The taxman says that the extra time will give “breathing space” to those who have been been affected by the coronavirus pandemic.

HMRC has already confirmed that it will accept Covid disruption as a reasonable excuse for people missing the deadline.

Taxpayers who cannot afford to pay their tax bill on time can also apply online to spread their payments over time, up to 12 months.

However, 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. Late filing penalties will not be issued for online tax returns received by February 28.

HMRC says it has become increasingly clear from the filing rate that some taxpayers and agents cannot file on time.

It has increased support for people who may need help with their tax liabilities. Once they have completed their 2019 to 2020 tax return, they can set up an online payment plan to spread self assessment bills of up to £30,000 over up to 12 monthly instalments.

Taxpayers can apply for self-serve Time to Pay via GOV.UK. Interest will be applied to any outstanding balance from February 1 this year.

More than 25,000 have already used the service, without needing to call HMRC, to manage their liabilities totalling £69.1million.

Those with bills over £30,000, or who need longer than 12 months to pay their bill, can call HMRC 0300 200 3822 to discuss Time to Pay.

Taxpayers who are required to make payments on account, and know their bill is going to be lower than the previous year, for example due to loss of earnings because of Covid-19, can reduce their payments on account.

• To discuss any issues raised by this article or any tax matters please contact me on 01772 430000