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HMRC considers simplifying SA reasonable excuse appeals

Agents may be able to appeal reasonable excuses on behalf of multiple Covid-hit clients, as outlined in one example HMRC is considering to ease the self assessment burden. But HMRC has not shifted its position on waiving late penalties or extending the deadline as the situation remains under review.

20th Jan 2021
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In a letter to the accountancy bodies, HMRC CEO Jim Harra echoed the tax department's plans to improve the process of cancelling penalties for taxpayers and agents who don’t meet the self assessment deadline. He reiterated that the process is to be made “as simple and easy as possible for all concerned” and is "carefully considering how to further ease the position for them".

One potentional option HMRC is considering was raised in Harra's letter on 18 January, which would see agents being able to make an appeal on behalf of multiple clients. 

The merits of allowing coronavirus to be accepted as a reasonable excuse and the additional burden this will place on agents have been debated within the profession

On this week’s Any Answers Live, Rebecca Benneyworth said: “The idea of doing a penalty run, sending it out and that costing taxpayers money for the postage, somebody having to handle that and do an appeal seems to me to be a massive waste of time, money and resources.”

The letter is clear that the handling of multiple reasonable excuses is one consideration, rather than a firm commitment. But it does show the agile approach HMRC is taking as it continues to keep the situation of SA filing penalties under close review until the filing deadline. 

Although Harra said filing rates are still holding up well, he said: “HMRC will not start to issue penalties until we have completed our review of the options and monitoring of filing rates and confirmed which approach we will take.”

An HMRC spokesperson added: "We know some taxpayers and agents will struggle to meet the deadline and are carefully considering how to further ease the position for them, including options that would significantly simplify the handling of reasonable excuses for taxpayers, agents and HMRC."

HMRC helpline

In the letter, Harra also declined ICAEW’s calls to open HMRC helplines over the penultimate weekend in January, citing “limited expected contact”. 

But Harra did confirm the extended hours of telephone service over the final self assessment weekend. HMRC helplines will be available from 8am to 6pm on Saturday 30 January and 9am to 6pm Sunday 31 January. In addition, he said the webchat service will be available both days from 8am to 8pm. 

In response to ICAEW’s other call to restore the agent priority access, Harra acknowledged the difficulties agents have had since HMRC closed the preferential service line at the start of the pandemic in order to protect the full range of customer service. 

However, Harra said performance on the agent dedicated line has much improved since April and May. “Although wait times remain higher than agents were used to pre Covid, the majority of calls are being handled, and agents are receiving similar customer service to our other telephone lines,” he said. 

ICAEW’s reports of members waiting over half an hour to get through to HMRC echoes the responses on Any Answers Live this week where viewers described similar wait times. AccountingWEB Live viewer Mark Peters spent 46 minutes in a call queue, while James Lambert tried calling a couple of times last week, but was met with the automatic message saying they are too busy and to call back later. 

Extension or waive late penalties

Harra's letter comes as ACCA, ICAEW and other professional bodies have continued to push HMRC to reconsider relaxing the self assessment deadline, explaining filing pressure the pandemic has had on their members. 

ACCA has backed the idea of extending the deadline out of concern for their members and “because HMRC was not seen to be as responsive to business filing pressures as other parts of government”. 

However, Harra remains committed to the 31 January deadline and will continue to encourage timely filing. “Any departure from this simple message increases the risk that taxpayers will miss both filing and payment deadlines unnecessarily or miss out on the simple arrangements we have put in place for securing time to pay,” said Harra. 

Rebeeca Benneyworth on this week’s Any Answers Live understood HMRC’s position. “If they announce it now, people will take their foot off the pedal... If they say you have another month, it will go another month.” However, she added: “HMRC would save a lot of time on both their side and our side if they would say no penalties until the end of February.”

Replies (8)

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By mbee1
20th Jan 2021 11:30

Even a simplified appeals process causes even more work for hard pressed agents and HMRC staff. So we have to wait for the penalty notices, consider making an appeal (possibly multiple appeals for different clients), wait for HMRC to acknowledge and deal with the appeal before we can tell the client the appeal has been accepted.

Just doesn't make sense. Extend the filing deadline to 31 March 2021 so no issue of penalty notice, no input from agents, no input from HMRC and make everyone's job easier.

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Replying to mbee1:
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By Moo
21st Jan 2021 19:54

I suspect HMRC are reluctant to bring in any relaxation which would mean amending their computer software and given that it is only the automatic stuff at HMRC which seems to be operating effectively I would second that view.
Multiple appeals for clients against late filing penalties could be dealt with via a standard letter (covid, covid, blah blah blah) and mailmerge from a spreadsheet list of penalty notices. They could then all be mailed together.
A pain certainly but probably not as bad as many agents are predicting.
Much worse for the poor eejits at the other end having to consider and process them.

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Replying to Moo:
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By johnjenkins
22nd Jan 2021 09:43

A Pain, Moo. This is only the start. We've got lockdown until end of March at least. Then who knows what it will be like after that. We then have next winter to contend with and I'm an optimist.

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By johnjenkins
21st Jan 2021 09:33

Rebecca, people will not take their foot off the pedal. Tax return filing normally means invoicing and money in the bank. The extension is not mainly for clients, it is mainly for agents who have had more work put on them this last year than ever before. Even SA wasn't as bad.
No, Jimbo is living in a world without covid, whilst the rest of us have to put up with his total ignorance.
You seem to forget, Rebecca, this is a one off.

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By Paul Crowley
21st Jan 2021 12:12

As said before
HMRC no longer fit for purpose
10 second solution to stop the £100 for ye 20
They managed to stop daily penalties for ye 19 (£900 ) despite no reasonable justification for being late last year

Why is the state not intervening, Why HMRC making decisions, not the government

What kind of a state do we live in?

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By djtax
22nd Jan 2021 10:40

I agree with all the sentiment expressed here but would add a comment that some clients are 'worriers' and may actually just pay the penalty to 'avoid HMRC scrutiny' or some such worry. This may also be the case for those who submit their own returns (after 31 Jan) without using an agent and simply do not understand the appeals process. HMRC these days seem to be in the business of deliberately trying to maximise money from penalties rather than just keeping to the core function of helping taxpayers to pay the right tax at the right time.

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Replying to djtax:
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By Paul Crowley
22nd Jan 2021 12:18

Concur
Penalty farming. Quite deliberate

But the same can be said about councils and parking fines. Once the councils were allowed to keep the money the workers were given targets for fines issued and rewarded for exceeding fine targets.

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Replying to Paul Crowley:
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By johnjenkins
22nd Jan 2021 13:42

Don't get me started on parking fines. All through covid we have had traffic wardens patrolling our streets (of course they are essential workers and they can't work from home was the council reply). One traffic warden even gave out tickets to hospital workers (they were revoked after an outcry).
Why should HMRC be any different?

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