31 January Self-Assessment deadline and filing penalties

Last Friday CIOT and other professional bodies received a letter from Jim Harra, HMRC’s Chief Executive and First Permanent Secretary, regarding next month's Self-Assessment deadline and filing penalties.

He thanked us for our constructive engagement on this issue. Within the letter, he confirmed:

• HMRC do not currently plan to waive late filing penalties
• No-one will have to pay a penalty if they cannot file on time because of the impact of COVID-19
• HMRC will accept pandemic-related personal or business disruption as a reasonable excuse, as well as pandemic-related delay on the part of an agent
• HMRC are extending the penalty appeal period by three months.

We have not asked for a deferral of the 31 January 2021 Self-Assessment filing deadline. This is because we have received competing views from members on the desirability of this, as well as recognising the benefits of encouraging taxpayers to continue to file ‘on time’, thereby obtaining clarity over their tax liability. We also understand that deferring the deadline would be a complicated process, and currently filing rates are broadly comparable with last year.

We have asked HMRC to waive late filing penalties for returns filed before 1 March 2021, in order to avoid adding further costs or compliance burdens at an already difficult time, and offered to work with HMRC as we recognise that it will be necessary to communicate this message carefully. We also highlighted to HMRC the need to consider penalties for late payment, and the tax credits deadline.

Other professional bodies asked for similar easements in relation to the deadline.

HMRC will continue to monitor the position in January, and we will continue our engagement with them early in the New Year.

Jim Harra’s letter can be read here