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Late-filing penalty relaxation

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HMRC has confirmed that self-assessment late-filing penalties will not be issued for returns received by 28 February 2021. Rather than applying the £100 fixed penalty automatically where the 31 January deadline for online returns is missed, with potential cancellation where the taxpayer has a reasonable excuse, the penalty will not be issued until the end of February.

The relaxation applies only to the filing deadline, with HMRC noting that ‘taxpayers are still obliged to pay their bill by 31 January’ and that ‘interest will be charged from 1 February on any outstanding liabilities’.

As part of the package of measures to help businesses affected by the coronavirus pandemic, HMRC has previously highlighted the new, automated online time to pay service for taxpayers with liabilities of up to £30,000. In order to use the facility, taxpayers must have no outstanding tax returns, meaning the 2019/20 return will have to be filed first. Where this has not been possible, businesses are advised to contact HMRC’s coronavirus helpline.

Dawn Register, head of tax dispute resolution at BDO, said: ‘HMRC clearly understands that those severely impacted by covid-19 should not face receiving a ‘brown envelope’ in February as it would result in unnecessary angst. This additional time will provide taxpayers and advisers with crucial latitude, which is needed in these unprecedented times. Previously, taxpayers would have needed to rely on adhering to HMRC’s ‘reasonable excuse’, which is open to interpretation – so this new certainty is very timely.’

Issue: 1517
Categories: News