You will no longer be fined for filing your tax return late if your business has been affected by coronavirus. These new rules will benefit millions of workers and will alleviate some pressure off many individuals.
Those affected businesses that will not be able to file their tax returns by 31 January will be able to fill out a “Covid excuse form” to HMRC to give themselves a time extension. This is fantastic news for millions of self-employed people who may have had to use the money they had saved for their tax-return because of the decrease in income caused by multiple lockdowns.
In addition to the above, those who have caught coronavirus in recent weeks or who’s accountant has recently caught coronavirus; as well as parents who are having to home-school their children, will have a “reasonable excuse” if they can prove that this has had an adverse effect on their ability to file their tax return.
We believe the chancellor is considering extending the deadline for all taxpayers until March, however a decision has not yet been made. HMRC said: “We want to encourage as many people as possible to file on time even if they can’t pay their tax straight away. But where a customer is unable to do so because of the impact of Covid-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.”
When a person misses their tax return deadline, they usually pay escalating dines, starting at £100 for being three months late, and then — if they have not filed by April 30 — an additional penalty of £10 a day from then on, up to a 90-day maximum of £900.
For workers who have filed six months late, they usually face a penalty of £300 – or 5% of the tax owing if this sum is greater – and if they are 13 months late, they will be charged an additional £300, or 5%, whichever is greater.
The concern has been raised by many that millions of simultaneous appeals will cause mayhem for HMRC customer service and that it would be more beneficial to simply extend the deadline until the spring. HMRC have also said that they will treat appeals with “great leniency” if coronavirus is cited as a legitimate reason.
Adrian Farrimond, Director at NR Barton Chartered Accountants said: “With the various lockdowns that people have experienced since March, many are struggling to get together the data that they need, often from third parties.
“The government should look at extending the deadline by at least four weeks — and potentially six or eight weeks.”
If you have any questions regarding filing your tax return, please contact your usual Partner or Manager or call us on 01942 242 245, and we will be happy to help.