Share this content
A ticking clock
istock_ticking-clock_Focus_on_Nature

One week left to file four million tax returns

by

The clock is ticking on the four million taxpayers who haven’t submitted their tax returns, as accountants make the final push to meet the 31 January deadline.

24th Jan 2022
Share this content

HMRC revealed today that out of the 12.2m taxpayers expected to complete a tax return for the 2020/21 tax year, there are still four million outstanding. 

Earlier this month HMRC announced that late tax return filing penalties would be waived until the end of February, although this doesn’t stop interest from being applied to outstanding balances from 1 February. 

HMRC, therefore, is urging these remaining taxpayers to file and pay outstanding liabilities or set up a payment plan ahead of the deadline. 

Myrtle Lloyd, HMRC’s director general for customer services, said: “We know some customers may struggle to meet the Self Assessment deadline on 31 January which is why we have waived penalties for one month, giving them extra time to meet their obligations.

Tax return season spills into February?

However, Kevin Sefton from untied has forecasted that even with the extra month many will still miss the cut-off deadline. 

The CEO of the personal tax app commented: “Even with the extra month, we believe that 700,000 people are in line to miss the filing deadline and will receive a £100 fine. HMRC has reported that it gets nearly 1,000 returns a day 14 months after the end of each annual deadline, and sometimes 500 a day 26 months after.” 

The number of outstanding tax returns, and the thought of millions taking advantage of the late filing extension into February, will be a bitter pill for accountants to swallow. 

Many are hoping to clear tax returns off their to-do list by the 31 January rather than letting the annual busy season continue into February and their practice planning season. 

Not telling clients

On AccountingWEB’s Any Answers Live broadcast last week, 75% of viewers said that they are not telling their clients about HMRC’s late filing penalty waiver announcement. 

“Everyone wants to get rid of it by the end of January,” said Louise Herrington, the owner of Performance Accountancy and a guest on the Any Answers Live broadcast.  

Not having to pay penalties for one month has enabled accountants like Any Answers Live guest Michael Beaver to spend more time on complicated tax cases. 

“You always get a complicated case in January that needs time spent on it,” he said on last Monday’s broadcast. “Usually, you have to get through and do what you can in the time you’ve got. Whereas now, you can say, ‘we’re going to park you until February and give it a thorough go through and get it fixed with little consequences’.”  

While 31 January is still circled on the calendar as the deadline, HMRC’s self assessment helpline will not open on Saturday 29 or Sunday 30 January and will operate as normal until 6pm on Monday 31 January.

Avoid losing another year

And now, after the past two years of non-stop Covid guidance and support, along with the annual tax return season, accountants are determined not to let self assessment spill over into February and lose another year of planning. 

“Last year was the most difficult year we had, and meant that more than 5% of tax returns filed for 2019/20 were after the 1 Feb which means we were working on self assessment well into February and even March,” said Beaver.  

“We were also exhausted after that year. We tripped over 31 January, kept working, and sleepwalked into April and it started all over again. We didn’t get the chance to take a step back, take a breather and determine how we wanted 2021 to work, other than we were going to hit the client base hard to make sure all the work was in early. But from a practice management perspective, we had a lost year.”

Stern conversations

Many will then be glad to get rid of this self assessment season. The late filing penalty waiver was welcomed by most of the profession, but it was bittersweet for accountants like Herrington that bunkered down over Christmas and New Year to slash their tax return numbers. 

But the biggest headache for many this year was SEISS grants. A lot of accountants have found themselves cast as the bad guys as they’re forced to have stern conversations with clients. 

“People get the amounts wrong, get the timing wrong and don’t disclose it to us at all. We get the excuse of ‘I didn’t think it was taxable’ and ‘I thought it was free money’, said Beaver. 

Start tax returns earlier

While HMRC statistics show that taxpayers are still leaving tax returns until the last minute, both Beaver and Herrington made a start on their self assessment campaigns earlier than in previous years. 

Beaver, for example, started to chase work early in the summer and then again in late summer. By September, clients were told that if they couldn’t get their work in by 31 October, the firm couldn't promise filing their tax returns on time. 

“Collectively we decided that last year was enough and we were going to work hard, but unlike last year where we had mandatory overtime Saturday working, we are not going to break ourselves. I wasn’t prepared to put my staff through that. Nine months is enough,” said Beaver. 

You can still catch up on the last episode of Any Answers Live with Michael Beaver and Louise Herrington. Then join us on 31 January for a special deadline day episode of Any Answers Live - register to watch the broadcast

 

Replies (15)

Please login or register to join the discussion.

avatar
By Crouchy
24th Jan 2022 19:25

i hate myself for going all MTD, but isnt this another example of why quarterly reporting just wont work

Even real time CGT has been extended to 60 days, so why do HMRC still think a 30 day turnaround is possible for the masses

Madness

Thanks (6)
Replying to Crouchy:
avatar
By GHarr497688
24th Jan 2022 19:48

I don't want to mention MTD however if the cap fits....

Thanks (1)
Replying to GHarr497688:
Tornado
By Tornado
25th Jan 2022 13:20

MTD ... what is that?

Thanks (0)
avatar
By GHarr497688
24th Jan 2022 19:50

MTD FILINGS:

Period covered Filing deadline
Quarterly update 1 6 April to 5 July 5 August
Quarterly update 2 6 July to 5 October 5 November
Quarterly update 3 6 October to 5 January 5 February
Quarterly update 4 6 January to 5 April 5 May

Thanks (0)
avatar
By Michaelr205
25th Jan 2022 10:19

I thought that there had been an extension for submitting tax returns to 28th February...

Thanks (0)
Replying to Michaelr205:
By Michael Beaver
25th Jan 2022 10:25

There is. Well, technically the tax returns are still due by 31 January, but HMRC will suspend automatic late filing penalties provided that the tax returns are filed by 28th February.

Thanks (1)
Replying to michaelbeaver:
avatar
By Michaelr205
25th Jan 2022 10:38

I read that after asking and realised the deadline hasn't changed, just the penalties.
After getting Covid (days before I was due the booster) in October the extra month is very welcome.
The only downside is the sense of relief which won't be there on 31/01 when all the returns have been submitted.

Thanks (0)
Replying to Michaelr205:
avatar
By Open all hours
25th Jan 2022 11:22

Except that we’ve receive 3 ‘late’ penalty notices for 2021 returns this morning.

Thanks (0)
Replying to Open all hours:
avatar
By Catherine Newman
25th Jan 2022 11:26

Are they for paper ones as the deadline was 31 October?

Thanks (0)
By Michael Beaver
25th Jan 2022 10:26

Interestingly, the radio ads are still saying that you need to file by 31st January.

Thanks (0)
Replying to michaelbeaver:
avatar
By Catherine Newman
25th Jan 2022 11:27

I saw something from Martin Lewis suggesting contacting webchat even though it has now been suspended.

Thanks (0)
avatar
By mkowl
25th Jan 2022 10:53

Why does it feel I have about 50% of the 4m left to do - sigh

Thanks (0)
Replying to mkowl:
avatar
By Michaelr205
25th Jan 2022 11:44

Because you have an enormously large practice?

Thanks (0)
avatar
By claudialowe
25th Jan 2022 12:27

Well only 0.0000025% of them are mine ;-)

Thanks (0)
Replying to claudialowe:
avatar
By RyanTheBeanCounter
27th Jan 2022 15:41

close, but no cigar, try again!

Thanks (3)