HMRC in last minute self-assessment late penalties U-turn

HM Revenue & Customs (HMRC) have confirmed that self-assessment customers will not receive a penalty for their late online tax return, providing they are able to file their returns by 28 February.

HMRC had previously stated that it would be adhering to the 31 January self-assessment deadline with the usual £100 automatic penalties for late filing.

However, HMRC’s Chief Executive, Jim Harra, has now issue a statement, confirming the relaxation of the rules for 2021.

He 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 has previously said that it was keeping the situation closely under review. It has become increasingly clear from the filing rate that some taxpayers and agents cannot file on time, and the department has now determined that ensuring no customer will receive late filing penalties if they file online before the end of February is the best way to help them.

HMRC has increased support for customers who may need help with their tax liabilities. Once they have completed their 2019-20 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments. Customers can apply for self-serve Time to Pay via GOV.UK. Interest will be applied to any outstanding balance from 1 February 2021.

More than 42,000 customers have already used the service, without needing to call HMRC, to manage their liabilities totalling almost £130 million.

Customers with bills over £30,000, or who need longer than 12 months to pay their bill, can call HMRC 0300 200 3822 to discuss time to pay.

Customers who are required to make Payments on Account, and know their bill is going to be lower than the previous tax year, for example due to loss of earnings because of COVID-19, can reduce their Payments on Account. Visit GOV.UK to find out more about Payments on Account and how to reduce them.

Customers who are trying to contact HMRC in the run up to the deadline can do so via webchat, Twitter or the Self Assessment phone helpline. They may also find the information they need via the free HMRC app or their Personal Tax Account.