Welcome relief as late-filing penalties waived until March

25 Jan 2021

The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) have welcomed today’s announcement from HMRC that self-assessment late-filing penalties will be waived for returns filed before 1 March.

The deadline for 2019-20 self-assessment returns is 31 January 2021. Normally, a return filed after this date would attract an automatic £100 late-filing penalty.1 HMRC have today (25 January) announced that they will waive this penalty – provided that returns are filed electronically on or before 28 February 2021.

The change mirrors the request from the CIOT and ATT, and similar requests from other bodies, for leniency given the difficulties faced by agents and taxpayers as a result of the pandemic.2 These problems were enhanced when the latest lockdown was introduced this month. While HMRC had always said that taxpayers issued with late-filing penalties would have their penalties quashed where they had been unable to file on time due to coronavirus, appealing penalties would have meant more work for agents, taxpayers and HMRC.

John Barnett, Chair of the CIOT’s Technical Policy and Oversight Committee, said:

“We are pleased that HMRC are implementing our recommendation not to issue late-filing penalties for self-assessments returns filed before 1 March 2021, but 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.”

Jon Stride, Co-chair of ATT’s Technical Steering Group, said:

“We welcome HMRC’s change of heart as it takes some of the pressure off taxpayers, their agents and HMRC at this difficult time. However, it is still important to file on time if possible and taxpayers should ensure their agent has all the required information to file the return promptly and pay the tax due.

“It is even more important to get the return in as soon as possible where a taxpayer is struggling to pay. HMRC’s enhanced Time to Pay arrangements3 which will allow taxpayers to spread their bills over the next 12 months are only available to taxpayers who have filed their tax returns.

“Taxpayers within the tax credits system should make a particular effort to file on time if they have not reported their final income figures to the Tax Credits Office as that deadline remains 31 January 2021."

Notes for editors

1. There are a range of penalties depending how late the return is. Returns filed late are usually charged an automatic £100 penalty. Once the return is more than three months, daily penalties of £10/day can be issued for up to 90 days. Once the return is over six-months late the penalties rise to the higher of £300 or five per cent of the tax due.

2. The CIOT, ATT and others originally wrote to HMRC on 11 November raising concerns about the ability of taxpayers and agents to meet the approaching deadline and followed this up in January. HMRC’s replies can be found here.

3. The ATT highlighted the enhanced Time to Pay arrangements in December.