By the time you are reading this, the 31st January 2021 deadline for filing 2019/20 personal tax returns will have passed. In any normal year, this would mean that anyone that has not already filed their tax return would be subject to an automatic £100 fine. Fortunately for those who have left things too late, the last year has been anything but normal.

Whilst Jim Harra, chief executive of HMRC, was making statements that nothing would change, as recently as December, there was a last-minute change of heart. On 25th January Harra announced that penalties would only be charged on returns received after 28th February. In the statement accompanying this announcement, he stated that HMRC can “reasonably assume most of these people will have a valid reason for filing late, caused by the pandemic”.

PICTURE: picjumbocom/pexels

At first glance this would appear to be an extension of the filing deadline. However, the actual deadline itself has not been moved. The announcement by HMRC simply means that late-filing penalties will not be applied for a month. The balancing payment for the 2019/20 tax year, plus any payment on account due, will still attract an interest charge if not paid by 31st January 2021. Other penalties for failing to file or pay on time will still apply on their normal dates.  

For late filing, the next penalties would be £10 daily penalties for filings after 30th April, continuing for up to 90 days. Further penalties accrue once a return is filed six months after the 31st January deadline. For late payment, a 5% charge of the amount due would apply on 2nd March, 30 days after the deadline. As with the late-filing penalties, additional late payment penalties apply for anything still due after six months.

There is an additional consideration for the self-employed. The Self-Employed Income Support Scheme (SEISS) claims relied on the tax returns for the previous year being filed. This is because the self-employed profits for previous tax years formed the basis of claims. For the first round of the SEISS, tardy filers were given a brief window to bring their tax affairs up to date. This is unlikely to apply for any future SEISS claims, which are likely to require returns having been filed on time. It is possible that any self-employed individuals who have not yet filed have already missed the boat, but filing as promptly as possible gives the greatest chance of meeting any leeway allowed.

If you haven’t filed and haven’t got an accountant already, early February might be the time to find one. With the announcement coming so close to the deadline, many accountants will have dealt with their existing clients as normal. Some will be looking for a well-earned rest after a year of new government schemes, but others will have spare capacity. This year more than any other has proved the value of having an advisor to support you through the ever-changing tax landscape.


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