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HMRC urged to reconsider tax return deadline extension

ACCA has called on HMRC to reconsider extending the 31 January self assessment filing date, as a survey from the accountancy body suggests an average of 30% of clients are likely to miss the deadline. 

12th Jan 2021
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Now the country is under further lockdown restrictions, ACCA’s Glenn Collins has called on HMRC to extend the deadline until the end of the tax year to provide relief for struggling businesses.

Collins pinpointed the increased need for individuals to isolate and the worsening response times to queries raised with HMRC as examples that illustrate the filing pressures on practitioners and their clients. 

Collins set out the need for an extension in a letter to HMRC’s chief executive Jim Harra after having been left “disappointed” by HMRC’s decision to reject the same calls from accountancy bodies in December and to accept instead pandemic related disruptions and agent delays as a reasonable excuse.

“Our request for an extension was not made lightly but out of concern for the welfare of our members, the welfare of their clients and because HMRC was not seen to be as responsive to business filing pressures as other parts of government,” said Collins in his response. 

Collins explained that accountants on the front line of helping SME businesses survive throughout the pandemic are now “increasingly concerned that many businesses will fail to meet the tax return deadline”. 

An ACCA survey of its members in December demonstrated the need to relax the deadline as on average 22% of clients were set to miss the 31 January filing date. Another poll in January didn’t show the tax return logjam easing, as almost half of practitioners now believed an average of 30% of clients are likely to miss the self-assessment deadline. 

The survey found that practitioners were especially hampered by “time consuming” HMRC solutions, with 40% of the survey respondents complaining that their difficulties in contacting HMRC were contributing to their struggles to file on time.

The ACCA has received high volumes of correspondence from its members which all voice the same widespread concerns about clients meeting the deadline. ACCA included an example of one of these concerns in the letter shared with HMRC’s Harra. 

The ACCA member explained the additional challenges facing them this January in addition to the lockdown restrictions, including one staff member testing positive for Covid, while many staff are now struggling with childcare issues due to school closures. 

The ACCA member said: “We had made resource plans for the extra work to be done in January but following the announcement of the lockdown yesterday it will now be very difficult to meet the tax return deadline for all clients along with the increased workload for furlough claims.”

HMRC to accept Covid disruption as a reasonable excuse

In December, Jim Harra told the accountancy bodies that HMRC did not want to “complicate the message by sending a blanket signal that it’s OK to file late”.

Harra recognised that some taxpayers will not be able to file on time “because of the impact of the pandemic on them or their tax agent” and therefore acknowledged that HMRC would accept “pandemic-related personal or business disruption” as a valid reasonable excuse. 

However, Harra said that those affected that are unable to file and receive a penalty notice will still need to cancel the penalty by contacting HMRC, and they will have an extended period of three months in order to do this. 

AccountingWEB reader Paul Crowley dismissed this ‘Covid excuse’ for a late return, calling it a “waste of time for taxpayers and agents” to appeal the penalties

As of the start of 2021, the number of tax returns filed was holding steady with 45% left to file. This number was tracking at similar levels of the same time last year. 

However, since then, the country has plunged into another national lockdown and accountants like AccountingWEB reader norstar are reporting being “inundated with queries on top of the tax returns”.

Replies (34)

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By ollieacca
13th Jan 2021 09:05

Surely by introducing this appeals process HMRC are creating further workload for themselves when they cannot manage their current levels. In addition it creates further non chargeable work for practitioners. I have no doubt HMRC will be speedy in their responses and we will not have to chase up progress on clients behalf's multiple times......

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Replying to ollieacca:
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By Paul Crowley
13th Jan 2021 17:59

Agree
HMRC hoping that people pay rather than go through a 6 month HMRC appeals process
HMRC cannot cope with paper, nothing to do with Covid, been like that for years
Now the idiot responsible is looking to create A 2 million strong appeals process

HMRC no longer fit for purpose

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By Duggimon
13th Jan 2021 09:53

That is an extremely stupid solution tot he problem. Dealing with the problem of too much left to do and not enough time to do it by introducing an extra administrative step for every one of what is reckoned to be 1/4 of people in Self Assessment, instead of just not issuing penalties, is either supremely idiotic or a damning indictment of how difficult it is for HMRC to change one thing in their automated penalty system.

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By Anthony G Thorne
13th Jan 2021 10:12

HMRC are responding to letters by saying they are working very hard in trying times but are unable to comply with their deadlines for providing a reply but they expect their customers to comply with the deadlines. Therefore one rule for HMRC and another for the customer where is the customer service?

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By C J EYRE
13th Jan 2021 11:24

I appreciate there have been problems because of the virus. However, the virus has been with us for 10 months now. I saw what was happening, and calculated there would be a lockdown in January.so I pushed and badgered my clients to let me have their records etc. ASAP.

I am now in the happy position of having sent my last Tax Return to the Revenue on Christmas Eve rather than the usual last few days in January.

I now have the luxury of having a lie in in the morning and no late nights burning the mid-night oil.

If I had the foresight to get things done, then why did other accountants not do the same and push their clients more.. I understand that some Accountants like to double their bills for work done in January, blaming unhelpful clients.

I posted the records for one of my book-keeping jobs to their Accountant's on 5 November, a very small job done on Sage. They have just started work on them this week, over 2 months later. If the Tax Returns are sent late, and they get fined, then who is to blame?

I appreciate there are genuine cases where due to the virus things will be sent late, so lets hope the Revenue look at these cases carefully. However, there will be the usual last minute or late ones, the same people as last year, and the years before. They are the ones the Revenue should hit.

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Replying to C J EYRE:
By Duggimon
13th Jan 2021 11:39

I spent most of April and May last year sorting out furlough claims and helping clients. When was I meant to do the two months of work that I missed due to this additional and unexpected work?

It's not a lack of foresight that's the reason for these problems now. I foresaw the problem last year and have been working hard to avoid it, but here it is, still a problem now. Perhaps if I'd foreseen the pandemic six months before it happened? A year? How much foresight is it my professional obligation to employ? Please do share your insights.

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Replying to Duggimon:
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By C J EYRE
14th Jan 2021 12:04

As a sole trader I too spent April/May onwards doing furloughed claims, also having to do furloughed wages for clients. Then there was the extra work sorting out how to submit the new Capital Gains Tax Returns, which is very time wasting.

Fortunately I have a good relationship with my clients and they responded to my requests to let me have their records early this year as I could see where things where heading, A good 95% of my clients use paper records, so not the luxury of just shoving a memory stick in and the accounts coming out.

Obviously with MTD coming in, then that is the next thing I will be working on and not waiting until the last minute. Call that foresight.

PS I have even got some clients records in for Years ended after 5 April 2020, so I will be ready to submit their 2021 Tax Return during April. That's how to do it

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Replying to C J EYRE:
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By johnjenkins
14th Jan 2021 13:14

You've changed your post. Don't you mean 5th April 2021. That's a bit of foresight for you.

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Replying to johnjenkins:
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By C J EYRE
15th Jan 2021 10:43

Sorry, not even myself with great foresight can get records in for years ended after 5 April 2021, as the last time I looked, we are not there yet

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Replying to C J EYRE:
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By johnjenkins
15th Jan 2021 12:43

I was being facetious.

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Replying to C J EYRE:
By Duggimon
14th Jan 2021 13:30

I don't know why you're focusing on getting the records in, I have all the records I need, the issue is that each year I have one year's worth of work to do. This year I lost about 25% of that year. If losing 3 months in April doesn't cause a pile up in January then you didn't have a year's worth of work to begin with.

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Replying to Duggimon:
Morph
By kevinringer
14th Jan 2021 15:01

Same here, most clients delivered early but I was so swamped with covid support enquiries, CJRS etc I had to put SA to one side. The log jam is definitely with me.

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Replying to C J EYRE:
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By johnjenkins
13th Jan 2021 11:50

If you have that much foresight (knowing that Jan is a problem for Accountants with or without a pandemic) why haven't you done this in previous years? Why wait until a pandemic to do it.
The crux of the matter is that this is a one off and HMRC should help, not hinder.

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Replying to C J EYRE:
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By ollieacca
13th Jan 2021 12:45

Duggimon has hit the nail on the head. We were been asked to complete significant extra work to keep businesses going, furlough claims, grant applications, cash flow projections, deciphering legislation that was changed on a daily basis. Compliance work took a back seat, which companies house understood and provided for. Having foresight was irrelevant if this work wasn't prioritised then in many cases we would probably not be needing to do any returns for businesses no longer trading! I also think this approach is linked to HMRC's inflexible systems for its "customers" if only I could take my custom elsewhere!

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Replying to C J EYRE:
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By Hazel Accounts
13th Jan 2021 13:43

You ask "why did other accountants not do the same" - well there are lots of reasons:
1. Helping clients with immediate financial consequences - CJRS, SEISS, BBLs, grants etc which took up a lot of time - regular emails etc which my clients appreciated and actually told their friends and gained me new business!
2. Urgent consideration of whether a couple of clients best action was actually a liquidation - one was and so then liasing with the liquidator
3. Home schooling 2 children!!
4. The book-keeper who does the basic work for my clients is classed as clinically vunerable so had to stop doing some things
And I could go on, but net result was I didn't really do much chargeable work in April and May except essential compliance (payroll, VAT) and as I am a sole practitioner there are no staff to take up the slack.....

Not asking for people to feel sorry for me, just please have some sympathy that not every accountant is in a position to acheive what you have.

I did realise it would likely be a problem (probably not 10 months ago - I don't think anyone did then) and have been chasing clients records and have actually filed more tax returns by December than last year and am reasonably confident the rest will be filed by end Jan (with couple unavoidable Covid-related exceptions).

And I don't charge extra for late delivery of records - I charge for work done.

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Replying to C J EYRE:
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By Paul Crowley
13th Jan 2021 18:08

Well so long as you are OK,
Who cares about the rest of the UK required to break lockdown and put lives at risk just because HMRC It Dept do not know how to switch of the penalty system.

Why should HMRC look to hit anyone on a filing issue?
Their time would be better spent curtailing frauds and evasion

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Replying to Paul Crowley:
By ireallyshouldknowthisbut
13th Jan 2021 18:22

@ Paul, Why on earth would you need to break lock down to file a tax return?

Genuinely baffled.

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Replying to ireallyshouldknowthisbut:
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By Paul Crowley
13th Jan 2021 20:04

I as in Me have numerous Digitally excluded clients who work in paper
I AS IN ME am getting clients arrive with their bits of paper

I assume you have no such clients

I as in me assume you do not give a toss about the digitally excluded, just like HMRC

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Replying to Paul Crowley:
Morph
By kevinringer
13th Jan 2021 20:37

I've got loads of digitally excluded clients too. HMRC has granted MTD exemption to 25% of my MTD VAT mandated clients on the grounds of digital exclusion. The level of digital exclusion amongst my SA clients is even higher.

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Replying to Paul Crowley:
By ireallyshouldknowthisbut
14th Jan 2021 09:29

Paul Crowley wrote:

I as in Me have numerous Digitally excluded clients who work in paper
I AS IN ME am getting clients arrive with their bits of paper

I assume you have no such clients

I as in me assume you do not give a toss about the digitally excluded, just like HMRC

Well yes we have a couple of "paper only" clients, but I certainly don't meet them and the moment, and quite frankly I discourage it at the best of times. It goes through the letter box, and if its too big they leave it by the door. I then bring it in, leave in the corner for a week or two, and wash my hands. Just as I thought everyone was since March.

The infection chance is no more than my shopping or any other delivery which gets the same treatment.

What are you doing exactly, shaking their hands, inviting them in for coffee and a biscuit? If so more fool you.

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Replying to ireallyshouldknowthisbut:
Morph
By kevinringer
13th Jan 2021 20:35

We've been working from home for months but here in rural Wales broadband is hit and miss and some of us have had to work in the office throughout. Most of us can work more efficiently in the office. Staff don't want to let clients down and as the deadline approaches more staff feel the need to get into the office because they can get more done. In some office somewhere someone is going to catch covid who wouldn't have done if HMRC had announced an extension.

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Replying to Paul Crowley:
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By kevinringer
13th Jan 2021 20:31

Paul Crowley wrote:

Who cares about the rest of the UK required to break lockdown and put lives at risk just because HMRC It Dept do not know how to switch of the penalty system.


HMRC do know how to switch it off. About 10 years ago there was a HMRC industrial dispute ono 31 January so HMRC extended the deadline. The industrial action was announced only days beforehand but HMRC's IT people were able to make the changes.
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Replying to kevinringer:
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By Paul Crowley
13th Jan 2021 22:11

Two consecutive days of 1500 deaths

But returns MUST be done, death or no death

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Morph
By kevinringer
13th Jan 2021 13:26

When HMRC needed out help with CJRS, we dropped everything. Without our help CJRS wouldn't have reached as many people. When we were up to our necks (some of us still are) with CJRS, BBL, SEISS etc, we had to keep on delaying getting on with SA. HMRC have cut themselves slack and given themselves as much time as they need (look how long they are taking for VAT registrations) and they know how much time we've lost too, so why don't they give us the same extensions they've given themselves?

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By ireallyshouldknowthisbut
13th Jan 2021 16:42

meh, my prediction, a 2 weeks auto extension on the 30th or 31st.

They are hardly going to say now or all the "cant possibly do it until 24 hours before its due" type will just put it off another month.

I would much rather no extension is granted until 24 hours before hand or is positively unhelpful for motivating the dregs or the barrel client wise into belated action.

Its only £100 anyhow, its just not worth getting excited about. its just not my problem, their fault for being lazy.

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Replying to ireallyshouldknowthisbut:
By Duggimon
13th Jan 2021 18:56

24 hours beforehand is a Saturday, which is when I intend to have mine done by, hoping they'll announce something on the Friday and give me the weekend off.

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Replying to ireallyshouldknowthisbut:
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By Jimess
13th Jan 2021 20:26

That last minute approach by HMRC is hardly going to help the stress level in the accountancy profession now. I for one am worrying myself silly about how we will get all the work done on time. Clients have, on the whole, been quite good about getting their books in this year, but some who have been shielding on and off have found it extremely difficult to get stuff to us. We are in a fairly rural area so in a lot of cases it is not just a five minute walk up the road to bring documents and we simply cannot afford to take the time out to collect from everyone that needs it. With the 14 day deadline on furlough claims and the number of employers using furlough since the current lockdown was announced increased enormously, we are now faced with clients needing furlough funds to help pay the wages at the end of the month, VAT returns to process by 7 Feb and self assessment deadline looming fast with a huge amount of returns still to process. We are all working at home so there are delays for clients who do not use or have access to computers to approve returns electronically, every day brings fresh challenges, every job we pick up seems to have a problem to sort, it's a real nightmare for us. All non SA work has been pushed back until February, so instead of a nice break after the SA rush we will still have a whole load of company accounts to process. We are all so tired and I just cannot imagine what it must be like for accountants with children having to deal with home schooling, or with vulnerable relatives to care for. Keep safe everyone!

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Replying to Jimess:
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By kevinringer
13th Jan 2021 20:38

Jimess, and don't forget SEISS3 deadline 29 January and all the clients phoning up asking whether they can claim.

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Replying to kevinringer:
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By Jimess
14th Jan 2021 07:11

No, I haven't forgotten about it - we dealt with that one by sending out information letters as soon as phase 3 was announced and have already dealt with most queries on that, there may be a little flurry nearer 29th, but I am not expecting this to be as time consuming as furlough. What I am finding really frustrating is that a few clients have recently sold rental property or second homes to provide some much needed funds, and the capital gains tax on property reporting process is a complete nightmare. Why on earth clients have to set up their own capital gains tax on property accounts if agents are filing for them is totally beyond the capability of my tired brain to understand never mind having to explain the process to clients in the middle of January!

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Replying to Jimess:
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By C J EYRE
15th Jan 2021 10:58

Fully agree with you regarding the extra work having to be done by clients with little computer skills and accountants, re the new Capital Gains returns.

I struggled with it at first. I was all set to log into a government Webinar on what to do etc, but they cancelled it at the last moment, and as far as I have seen, they have not tried to run it since.

The new system seems a farce when you end up having to estimate what tax is payable, and then you have to enter all of it all again on the 2021 Tax Return.

Delaying it for a year would have helped everybody in these troubled times and taken some of the pressure off accountants.

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Replying to C J EYRE:
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By johnjenkins
15th Jan 2021 12:46

Delaying it for a year would have needed a bit of foresight don't you think?

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Replying to Jimess:
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By johnjenkins
14th Jan 2021 09:00

Do yourself a favour. Contact your clients and ask them if you can, on this occasion, put in an estimated return with a view to doing an amended one asap. That way you give, not only yourself, your clients a less stressful time.

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Replying to johnjenkins:
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By kevinringer
14th Jan 2021 12:57

That will give us breathing space for SA but not tax credits where the deadline is 31 January full stop.

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By janefg
15th Jan 2021 15:14

Is it reasonable excuse if the accountant has had health issues after 6 April?

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