Self-assessment taxpayers given extra month to file returns
Written by Hit Music Radio News on 25/01/2021
Millions of self-assessment taxpayers will be given an extra month to file tax returns after the government recognised the “immense pressure” caused by the pandemic.
Returns are normally due by 31 January but HM Revenue and Customs (HMRC) said there would be no penalty for submitting them late if they were in by 28 February.
The deadline covers those who are self-employed as well as people receiving incomes above certain thresholds from things like property and investments.
HMRC said it expected more than 12.1 million people to complete a self-assessment tax return for the year to 5 April 2020.
It said on Monday that more than 8.9 million had already filed their tax return and that it was encouraging anyone who has not yet done to do so by 31 January if possible.
But the initial £100 penalty which usually applies for filing late – unless the taxpayer has a reasonable excuse – will not be levied.
However taxpayers will still have to pay their bills by 31 January with interest charged from 1 February on any outstanding liabilities.
Those who cannot afford to pay up straight away can apply to spread the sum over 12 months – once they have filed their tax return.
HMRC chief executive Jim Harra said: “We want to encourage as many people as possible to file their return on time, so we can calculate their tax bill and help them if they can’t pay it straight away.
“But we recognise the immense pressure that many people are facing in these unprecedented times and it has become increasingly clear that some people will not be able to file their return by 31 January.
“Not charging late filing penalties for late online tax returns submitted in February will give them the breathing space they need to complete and file their returns, without worrying about receiving a penalty.
“We can reasonably assume most of these people will have a valid reason for filing late, caused by the pandemic.”
HMRC had previously said it was keeping the situation under review and has now said it was “increasingly clear from the filing rate” that some taxpayers could not file on time.
The decision was welcomed by industry bodies including the Chartered Institute of Taxation (CIOT).
John Barnett, chair of the CIOT’s technical policy and oversight committee, said: “It remains important that anyone who can file their return on time by 31 January 2021 does so.
“This is a relaxation on the first late-filing penalty only.
“Taxpayers are still expected to pay their tax by 31 January 2021, even if only an estimated figure, to avoid interest accruing.”
© Sky News 2020