HMRC has rejected calls from professional bodies to relax the self assessment filing deadline. Penalty notices will be issued as usual to all who file late but more time will be allowed to appeal.

The Institute of Accountants in England and Wales (ICAEW) have reported that many accountancy practices have made contact with them in relation to the 31 January self assessment filing deadline. With so much additional work this year as a result of helping clients make COVID-related claims for loans and grants, as well as suffering COVID related challenges from new working arrangements and health considerations of their own, there is concern that many may struggle to meet the filing deadline for all their tax returns.

Helpfully the ICAEW wrote to HMRC and working with other professional bodies, met to discuss whether it might be possible to put back the date from which late filing penalties would apply.

ICAEW’s Tax Faculty has now received a reply to this request from Jim Harra, Chief Executive of HMRC, and per the ICAEW website it has been asked to convey is as follows:

“[HMRC] wants to encourage as many customers as possible to complete their returns by 31 January 2021, even if they can’t pay in full, because filing their return is key to crystallising their SA liability and being able to get our support, if they need it, to pay their tax.

“But no-one will have to pay a penalty if they cannot file on time because of the impact of the COVID-19 pandemic.

“We do not want to complicate this message by sending a blanket signal that it’s OK to file late. That could have some serious disadvantages for our customers; de-coupling the payment and filing dates might confuse customers, and even lead to non-payment, interest accruing, and late payment penalties being triggered. It would also encourage some customers to file late who really don’t need to.”

HMRC will accept pandemic-related personal or business disruption as a reasonable excuse. If the taxpayer’s return is late due to pandemic-related delay on the part of an agent, this will also be a valid reasonable excuse.

HMRC will also be giving taxpayers and agents more time by extending the penalty appeal period to three months.

Should you have any queries regarding your tax return or the filing deadline please contact your usual partner or manager.

You can read the full HMRC response letter by clicking on these words.