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Covid workload prompts calls for SA deadline extension

The pressures of the coronavirus workload has led accountants and now the ICAEW to consider whether HMRC should extend the self assessment deadline. 

10th Nov 2020
Editor AccountingWEB
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As the constant coronavirus workload drags on and accountants are rushing to the aid of their clients, concerns have grown about the 31 January self assessment deadline. 

The ICAEW’s tax faculty has raised concerns about the impact of the excessive coronavirus workload and the effect this has had on practitioners’ self assessment plans, and is seeking views on whether extending the deadline until 31 March 2021 or waiving late filing penalties would solve the problem. 

‘At least a month behind’

Some AccountingWEB readers have called for a delay since September. Stats696, for example, highlighted the “massive pinch” Covid has had on their firm’s workflow. 

AccountingWEB regular Michael Beaver backed the campaign in October when waiting for the latest tweak to Rishi Sunak’s Winter Economy Plan, asking on Any Answers whether anyone else has given up on meeting all their 31 January deadlines

“Short of killing myself and my staff between now and Jan 31, I can't see how we can get through our normal compliance work (which is already weeks behinds) and now while supporting yet another further amended updated undocumented scheme,” said Beaver. I am happy for our clients who [Sunak’s new support] will help, but I'm exhausted.”

An anonymous reader echoed Beaver’s concerns: “It seems like any time Rishi Sunak opens his mouth, we get put back two weeks in our schedule of work.  I estimate we're at least a month behind in our compliance work, and I'm already dreading January.”

Since then, the coronavirus support measures have changed several times over and the call to delay the deadline has gathered momentum. Speaking on AccountingWEB Live’s Any Answers Live webinar, Sharon Pocock from Kinder Pocock said she’s started her self assessment workload where they already had the information, but the January outlook doesn’t look good. 

“Before the [lockdown] news came out, I thought I am not sure I have the energy for this now. I don’t think we have got over the last [lockdown]. We’re usually on it with personal tax returns. But we’re only starting to request information,” said Pocock. 

Tax Faculty considers backing extension

ICAEW has received similar concerns from their members in practice about meeting the self assessment filing deadline while juggling the Covid-19 workload. The Tax Faculty committee is considering whether ICAEW should ask HMRC to extend the SA deadline.  

The feeling amongst ICAEW members is mixed with some ahead of schedule, while others are under pressure providing pandemic-related business advice. 

The Tax Faculty noted that the effect of the pandemic and meeting the SA deadline goes beyond the client work, with the upheaval of the virus, self-isolation and caring responsibilities has had an impact on firm’s staff. 

Added to the virus-related workload is the post-Brexit transition rules which the committee said may cause an influx of businesses seeking importing and exporting advice from practitioners.

Impact of delaying the deadline

An extension to the deadline would have several implications, admitted the Tax Faculty. These include the need to extend the finalisation date for tax credits and the 30-day date for late penalties also need to change. Other considerations include the effect on the enquiry window for SA returns and the collection of Class 2 national insurance contributions which require manual intervention. 

The Tax Faculty, instead, is leaning towards another option of waiving late filing penalties for 2019/20 SA returns filed by 31 March 2021. For this to work and remove added pressure on taxpayers, the faculty said the waiver needs to be automatic rather than having formal appeals. 

Waiving taxpayer late filing penalties would ease the load on agents who have the necessary information from the taxpayer but they’re overwhelmed by Covid workload. As the ICAEW said, a taxpayer cannot use reliance on an agent as a reasonable excuse for a later filing. 

Not a consensus 

Like the ICAEW, the AccountingWEB community isn't agreed on an SA deadline extension. Not every accountant has found the last few months detrimental to their self assessment plans. Bernard Michael has had a lot of clients send information earlier than usual. “I can see a gap come end December,” he said. 

Duggimon is also way ahead after being so far behind in June and approaching a meltdown. "Working from home has massively increased my productivity,” they noted. 

Adam.arca also foresaw a capacity crunch back in the summer so warned clients not to leave things too late. But even though he’s slightly ahead on tax returns completed and billings he’s still concerned about what’s coming round the corner. “I seem to have a whole raft of jobs which I would normally complete in the spring / early summer,” he said. 

Would an extension of the self assessment deadline help your workload? Do back another solution like waiving late penalties? Or should the 31 January deadline remain?

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Replies (60)

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By webpoints
10th Nov 2020 14:31

My own view at present is don’t change the 31 January deadline because you are just moving the problem into other busy periods and many elections etc may depend on that date. But do waive penalties chargeable for all of the period that furlough relief applies which is currently from March 2020 to 31 March 2021. That could be for 2019/20 tax returns and for 2018/19 tax returns, or indeed for any late ones for earlier years that are being filed in that period. That relief might be just for late filing penalties. If we can get late payment penalties waived too that would be even better. I know people have had the use of the funds but until their tax returns are prepared they might not know how much to pay. Paying interest on late payments may still be appropriate.

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By claudialowe
10th Nov 2020 15:04

Noooo - please don't extend it, as I've booked to go on holiday on 2nd February (COVID permitting), and I want to get away with a clean conscience :-)

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Replying to claudialowe:
By michaelbeaver
10th Nov 2020 15:53

I remember holidays ...

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Replying to claudialowe:
By johnjenkins
11th Nov 2020 09:32

I feel very strongly that we will have another lockdown throughout February but after that watch the growth rate.

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By the_fishmonger
10th Nov 2020 17:02

We do need to keep the filing deadline at 31st January, if only to ensure the chancer clients still aim to supply their bag of delights on time. It does, however, make eminent sense to have no late filing (or late payment) penalties hit until after 31st March. Perhaps it should be fropm 6th April so that people don't think 1st April issued penalties are a cruel April Fool.

IIRC, the filing deadline is hardwired into the coding of the whole shebang, whereas the penalty deadline can be shunted in exceptional circumstance. From what I recall of the past, there have been a couple of years where this was the case due to IT issues - once when they rather thoughtfully twiddled with the code in Jan and one year the bandwith/gateway couldn't handle the traffic and everything fell over.

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Replying to the_fishmonger:
By michaelbeaver
10th Nov 2020 17:37

Not to mention this year when they gave an amnesty to self employed people to catch their tax returns up so they could qualify for the SEISS.

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By seitler
10th Nov 2020 19:57

I agree - no need to extend beyond 31 January. I like to go on holiday in Feb.
Besides I reckon there's a chance Rishi Sunak will base the 4th SEISS grant on 19/20 Returns which he is announcing in Feb 2021. He can't do that before the deadline

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Replying to seitler:
By spilly
10th Nov 2020 21:25

In which case we would need to know this ASAP so we can prioritise those clients that may be eligible to claim this. It’s probably going to be about 40% of our SA clients, mainly because they are in the event and conference industry which is not due to reopen until the spring.

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By anthonystorey
27th Nov 2020 10:47

I haven't read all the posts so apologies if I am repeating anything that has already been said but if all the work
hasn't been done by the end of January the answer is simple - file Returns with provisional figures and do the work in the quiet months of February and March. I never understood why HMRC decided to have the end of January as the deadline for filing and paying tax. It would make it easier for everyone if the date was moved permanently to the end of March.

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Replying to anthonystorey:
By kevinringer
27th Nov 2020 16:30

The problem is Tax Credits for which the 31 January deadline is absolute. HMRC won't accept final income reported after 31 January and in some cases will demand repayment of all Tax Credits paid for the year.

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