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.
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”.