Market leading insight for tax experts
View online issue

Further guidance on self-assessment penalties

printer Mail

HMRC has issued further details following its 6 January 2022 announcement on the relaxation of self-assessment late filing and payment penalties for 2020/21 tax returns. Key points include:

  • Self-employed taxpayers who need to claim certain contributory benefits soon after 31 January 2022 must ensure their Class 2 NICs are paid on time together with any 2020/21 balancing payment to make sure their claims are unaffected. Those who enter into a time to pay arrangement are asked to contact HMRC ‘as soon as possible’. Taxpayers whose profits fall below the small profits threshold for NICs (£6,475 for 2020/21) and want to pay voluntary Class 2 contributions after 31 January are also asked to contact HMRC.
  • Tax credit claimants should try to make their declarations by 31 January if possible, to avoid HMRC basing calculations on information held at that time. Where declarations are made after that date but by 28 February, HMRC will use discretionary powers to re-make the decision if the delay was due to covid. HMRC says that taxpayers are not expected to prove the delay was covid-related.

On reasonable excuse associated with agent covid delays, the guidance says: ‘If a taxpayer has taken all reasonable steps to get their affairs in order to allow their agent to meet the filing deadline, and that agent has been delayed due to covid, then the agent delay may constitute a reasonable excuse.’

HMRC also confirmed the following:

  • The payment easement also applies to SA700 (non-resident company income tax returns) and SA970 (pension scheme returns).
  • Individual partners will not be charged a late filing penalty in respect of a 2020/21 partnership return (SA800) provided that the partnership return is filed online on or before 28 February.
  • The deadline for nominations of special mixed funds has been moved to 28 February.
Issue: 1560
Categories: News