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Nearly 1.8m late filers miss tax return deadline

More than 10.7m taxpayers filed their tax returns by 31 January. Yet nearly 15% didn’t make the deadline. This is almost twice the amount reported last year. 

1st Feb 2021
Editor AccountingWEB
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On the day after the self assessment deadline, HMRC had received 10,743,387 returns (which includes expected returns, unsolicited returns and late registrations). Another 1.8m are still outstanding. 

The majority of the tax returns (95.6%) were submitted online, which inches ahead of the 93% of returns filed this way in 2020. 

However, HMRC noted that due to the unusual filing patterns this year, the final figure for 31 January may end up lower as the 392,000 unsolicited returns/late registrations are an estimate based on returns received by early January. 

Late filers up on last year

Although the filing rates were on track at the start of the month, the remaining tax returns are up on the 958,296 late filers this time last year. After HMRC’s decision to waive late filing penalty, the 1,790,368 taxpayers who still need to file will not incur an immediate £100 fine as long as they submit their tax return online by 28 February.  

HMRC will also not charge late filing penalties for SA700s and SA970s received in February, which can only be filed by paper; and SA800s and SA900s.

While these late filers have some breathing space on the penalty, interest will still be chargeable on any tax not paid by the 31 January due date. HMRC is encouraging these taxpayers to pay an estimated amount as soon as possible to minimise any interest.

A 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, before 3 March 2021. 

Karl Khan, HMRC’s interim director general for customer services, reiterated that HMRC will not send anyone a late filing penalty as long as they meet the 28 February due date: “We know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic. Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.”

Last week HMRC’s chief executive Jim Harra waived late penalties after recognising the “immense pressure that many people are facing in these unprecedented times”. 

Did the penalty U-turn make any difference?

HMRC’s 11th hour tax penalty U-turn didn’t give practitioners permission to take their foot off the accelerator. By 30 January AccountingWEB readers were swapping tax return war stories as they waited for the latecomers and the “PITA client taking advantage of the moving deadline.”

In a similar story during this week’s Any Answers Live webinar, Accounting Excellence award winner Sian Kelly from Inform Accounting said the announcement was “a little late in the day”, but her firm still aimed to finish on the Friday before the deadline. 

“Doing tax returns into February wouldn’t have helped us out, it would have just rejigged the work balance,” she said.  

AccountingWEB regular Glenn Martin also didn’t see the announcement as a game changer. 

“We have a few tax returns that haven’t turned up yet. We’re assuming that they’re not clients anymore,” said Martin.

“I don’t know why they make these decisions so late. If they made the decision back at Christmas time you could have planned your month better. But just giving you a week or so, it doesn’t really help at all.”

Hardest tax season

With 85% of tax returns filed, practitioners can finally breathe a sigh of relief and say goodbye to what Martin called his “hardest SA season”.

Tax returns weren’t the biggest problem for Martin, it was everything else. “This year from March onwards we’ve been working beyond capacity, had no holidays, recruitment has been difficult, and everything has just been stressed to the limit. You can deal with that for a few months. But when it’s 10 months, it grinds you down.”

He added, “It’s like a lottery when a client calls you. It could be anything.”

Agents suffered further headaches this morning when HMRC systems crashed, leaving some AccountingWEB readers unable to file their last handful of tax returns.

“At least they had the good grace to crash on 1 Feb, not 31 Jan, though that doesn’t help me file my last payroll for January…” said ClaudiaLowe. 

How was this year’s self assessment season for you? Have you started drawing up plans for next year? Join our upcoming ‘What would you do differently?’ webinar on 11 February to  find out how you can beat those January blues next year. 

What would you do differently?’

Replies (17)

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By memyself-eye
01st Feb 2021 18:39

This is what happens when the deadline is extended.

Lesson?

People do not like paying tax!

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Replying to memyself-eye:
neand
By neanderthal
02nd Feb 2021 16:07

people don't mind paying their fair share. but for sure they don't like paying through the nose. taxpayers alliance report published yesterday shows that taxes are at the highest for the last 70 years since immediately after the second world war - and to think that we are not yet at the point where they will increase taxes further to pay for the billions they borrowed to save us!

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Replying to neanderthal:
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By dwgw
02nd Feb 2021 17:27

The Taxpayers' Alliance's deafening silence on the billions of taxpayers' funds squandered on the profiteering of dubious and inexperienced PPE 'businesses' set up by government cronies and the test and trace fiasco renders anything it has to say on tax-related matters worthless.

And that's before we consider its longstanding silence on the sources of its funding.

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Replying to memyself-eye:
neand
By neanderthal
02nd Feb 2021 16:07

people don't mind paying their fair share. but for sure they don't like paying through the nose. taxpayers alliance report published yesterday shows that taxes are at the highest for the last 70 years since immediately after the second world war - and to think that we are not yet at the point where they will increase taxes further to pay for the billions they borrowed to save us!

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By Paul Crowley
01st Feb 2021 19:49

Please feed back the position on 28 Feb

My guess is that come 28 Feb it will be better than 31 Jan last year

We were guessing HMRC could not cope with 1 Million Covid Appeals
Good job they moved the penalty deadline, They would take years to cope with 1.8 Million paper appeals

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By ireallyshouldknowthisbut
02nd Feb 2021 09:02

I imagine a lot of agents returns got filed Monday given HMRC's system fell over, and there was no reason to be working late on Friday / at the weekend to pander to the procrastination crowd.

Plus all the "cant do it until the deadliners" will of course have put it off for 4 weeks.

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By mkowl
02nd Feb 2021 09:45

Well I was better than the national average at 11% not filed - but that is masked somewhat by "the usual suspects" that still haven't filed prior years either

Most of those will be done this week as i didn't see the point of rushing them

Way round i have just sent emails to the stragglers saying I am having the last week of February off so don't expect me to make time for you

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By LukeS
02nd Feb 2021 09:50

And how many of them were genuinely down to covid?!

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Replying to LukeS:
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By andrew1211
03rd Feb 2021 09:13

hardly relevant......

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By johnjenkins
02nd Feb 2021 09:55

Not really the correct position is it? We need to know how many of those filed had provisional or estimated figures.

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By wyoming
02nd Feb 2021 10:01

Most of my clients didn't seem to know about the extension - and I wasn't going to go out of my way to tell them about it, except in cases where it suited my workflow to use the extra time. Generally, I didn't want the January misery rolling into February as well, so pushed ahead and managed to submit 95% by 31 Jan.

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By Ian McTernan CTA
02nd Feb 2021 11:50

Grand total of 3 not done by last Friday, and they didn't manage to get me the missing information.

Probably my easiest 31 Jan deadline ever- but that's what happens when you work every day from early December (took Xmas day off, that was it) instead of closing for a week or two over Xmas.

Oh and not having more clients than I can handle.

Lessons to be learnt for those 'pile it high, grab as much work as we can' types.

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Morph
By kevinringer
02nd Feb 2021 12:13

I wonder how many provisional returns were filed 31 January 2021 compared to previous years. Normally I file 100% by 31 January but this year I had to spend so much time supporting clients through covid I was months behind. I worked 7 days a week for the last six months and am now 'only' 3 weeks behind. So I need this extension. This year I filed provisionals for clients who need to pay voluntary class 2. All clients had delivered paperwork.

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By michaelbeaver
02nd Feb 2021 12:09

By Friday evening we had filed 653, and had a further 24 out for signing but not returned/signed (of which 8 or 9 approved yesterday), and an additional 30 or so who hadn't yet delivered paperwork to us - most of whom are regular offenders.

Awareness of the extension within our client base was very low so I don't think it had an impact on clients delaying their information further, but it was certainly useful to us to help manage clients where it was genuinely needful.

It seems our experience was broadly reflective of everyone else's, which is good to see!

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By dwgw
02nd Feb 2021 12:45

HMRC added a little spice to the mix for me on Friday (29th) by not recognising my user credentials and thus preventing me filing anything. I was re-recognised on Saturday and able to file over the weekend.
Not sure what was going on with their system but they also prevented a late SEISS 3 application made at about 11:30pm on 29th. Deadlines should work both ways.
If HMRC are going to conduct all their business online, they really need to have more reliable systems themselves and make it easy to access help or register a problem when things aren't working as they should.

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Replying to dwgw:
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By Southwestbeancounter
03rd Feb 2021 14:07

I got so fed up last week I emailed Mr Harra direct - got an answer within a few days from a government dept. who sorted out my issue - my rant about no ADL might have had something to do with it!

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By Donald MacKenzie
02nd Feb 2021 17:59

I am just glad HMRC did not ruin my February by announcing the penalty holiday earlier. If my usual bunch of clients never done before January had been aware that penalties would not apply for returns submitted in February they would have seen that as permission to deliver stuff to me in February.

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