HMRC has said it will waive the penalty fines for the filing of some late self-assessment tax returns, if the individual can demonstrate they have been ‘adversely affected’ by COVID-19. For example, parents who are home-schooling children due to the current lockdown are considered to have a ‘reasonable excuse’ for missing the filing deadline of 31 January if they can show this has affected their ability to complete their accounts on time. Usually, late filing leads to a fine of at least £100 so this recent news is welcome for the many self-employed individuals who have been heavily impacted by the latest lockdown and the closure of businesses.
Individuals who decide not to file their tax returns on time are required to fill out a COVID excuse form and complete and submit their self-assessment return as soon as possible after that.
The tax payment date remains at 31 January, however, and interest will be charged on any late payments.
Therefore, at PM+M, we are still encouraging our clients to file their self-assessment returns on time, where possible, even if they can’t pay their tax straight away. HMRC has said that support is in place for those who may struggle to pay, with taxpayers able to spread the cost of tax payments of up to £30,000 over the next 12 months (see our recent blog for more on this). However, this service is only accessible once your tax return has been filed. Therefore it is best to submit your tax return as soon as possible and then you can apply to spread your payments.
HMRC expects 12.1 million tax returns to be filed this year, having seen around 55% of self-assessment customers file their returns already. However, it’s worth noting that more than a million missed the deadline last year.
We urge those who are yet to file their self-assessment returns to act now. This year’s filing process may be a more time-consuming than anticipated and you may need to account for any deferrals taken throughout the course of the past year (see our recent blog which outlines this in more detail).
If you require any support or assistance with preparing or submitting your return, we would be happy to help. Please contact your usual PM+M representative or email firstname.lastname@example.org.
This information is correct as of 14 January 2021. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.