HMRC waives late filing tax return penalties
For the second year running, HMRC is waiving late filing penalties on tax returns for one month as the Covid pandemic continues to wreak havoc on the capacity of agents.
Replies (40)
Please login or register to join the discussion.
That's annoyingly early. Some hints for now would have done and a formal announcement w/c 17th would have been more helpful
I was hoping to keep the pressure up on several clients who need to pay, sign off, or send the last couple of bits, this just lets them slide on for another 6 weeks.
At least they've announced it at the start of the month this time.
There'll be some clients who'll think "Great, the filing deadline's been moved! I'll leave it another month before getting my books in!" but that's their look out.
Technically of course anything filed after 31/1 is still late - will the risk of enquiry still be increased?
Edit: I see the enquiry window will still be extended for post-31/1 returns.
You beat me to it
AND no late payment penalties if paid before 1 April (or set up a payment plan)
I had an email from SPA
Dear ASG Members,
Message from Jim Harra
As the Income Tax Self Assessment filing and payment deadline of 31 January draws closer, I know that the latest developments in the COVID pandemic are causing concerns and problems for taxpayers and agents. I therefore wanted to contact you directly following HMRC’s announcement today that we will not charge:
1. late filing penalties for those who file online by 28 February 2022
2. late payment penalties for those who pay the tax due in full or set up a payment plan by 1 April 2022.
This will give SA taxpayers and their representatives additional time if they need it. Your members are once again at the forefront of advice for affected taxpayers, and we know that this, along with likely staff absences in January, will have an impact on their capacity to meet the 31 January deadline.
We think it is reasonable to conclude that significant numbers of taxpayers will have a valid, COVID-related reasonable excuse for filing or paying late, so it is more sensible not to charge the penalties for a short period rather than rely on the usual appeal route.
The waivers will operate in the same way as last year. We are not moving the filing or payment deadline and other self-assessment obligations are unchanged. Interest will be charged as usual from 1 February on outstanding amounts.
I would value your support in getting the message out that taxpayers should file and pay on time where possible, but this easement is there for those experiencing difficulty.
Our Time to Pay options are still available to assist customers. Once they have filed their 2020-21 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000 over up to 12 monthly instalments.
We expect the extra month will help most people. We do not believe that a longer extension is necessary. By the end of February last year, we had reached broadly the same filing position as we normally reach by the end of January. If customers still cannot file by 28 February or pay (or set up a payment plan) by 1 April, the usual right of appeal against any penalty will be available, with COVID as a possible reasonable excuse.
I very much hope that you will welcome this decision. I am happy for you to share this letter with your members.
Kind regards
Jim Harra
Chief Executive and First Permanent Secretary – HMRC
Thanks for sharing Paul. An acknowledgement of our services from none other than Jim Harra!
I always search the middle of Jim's missives for the salient point ... and there it is:
"it is more sensible not to charge the penalties for a short period rather than rely on the usual appeal route"
In other words ... this isn't to make life simpler for you or your clients, it's to avoid yet another crop of administration with which HMRC are unable to cope.
Agree
Same as last year
Promissed that we could bulk appeal all penalties
What said the IT People? we cannot do that
What said the managers? we are already overwhelmed with paper, and cannot get paper to WFH without a pile of scanning and loads more errors
Result
Stretch a month
In other words ... this isn't to make life simpler for you or your clients, it's to avoid yet another crop of administration with which HMRC are unable to cope.
That's a very cynical view. Whilst it undoubtedly will save time for HMRC not to have to review and accept a bunch of appeals, it saves the profession even more time in making them. There's plenty to criticise HMRC for, so let's not weaken those arguments by levelling criticism at things we agree with (though I accept that some in the profession have not welcomed this leniency).
Cynical maybe, but only to the extent of joining up the dots in what Jim said.
If you think I'm being *unduly* cynical ... do you think the same announcement would have been made IF the administration of dealing with all those appeals had been a simple automated procedure that caused HMRC no additional effort at their end?
So Jimbob listens when it suits HMRC but not on QU, which I think has far more professional opposition than a penalty waiver.
great news, but please don't tell our clients. I want them all to think it is still 31 Jan please.
On balance its the right thing to do.....not least because clearly the Revenue are not coping well with COVID, and they are already applying hypocrisy at a high level as regards deadlines set for their 'customers' whilst they are unbale to deal with anything within a timescale of any kind.
So HMRC recognises that taxpayers and agents struggle to file tax returns within a 10 month window, but under MTD they think we will cope with having to do them at least 4 times a year within 30 days or so.
Jon they are trying to get rid of us. we are not required. tax is now so simple, the clients can do it all themselves and will no longer need accountants.
The man on the quickbooks advert said so.
Jon they are trying to get rid of us. we are not required. tax is now so simple, the clients can do it all themselves and will no longer need accountants.
The man on the quickbooks advert said so.
Yes, you can even do your book-keeping whilst you are skateboarding. Amazing really.
QB really p£££es me off. People actually think they can prepare and file their tax return through it. It's so missleading.
someone asked for accountant recommendations on our local FB community page yesterday. Very happy to see we got lots of mentions, but someone wrote:
"Get quickbooks, that way you wont need an accountant all the time and it keeps the expense low"
I thought it would be inappropriate to respond with the laughing emoji.
I KNOW there are some people out there who are very capable of doing their own accounts and tax returns, and good luck to them, but the idea that everyone can and will do them properly themselves is laughable.
QB called me in December, the usuall chat about plans for clients to use QB. I politely told her that I have been migrating clients away from it and wouldn't recommend it to anyone. She wasn't too pleased when I told her, why would I recommend a product that devalues my services and makes my life harder. When QB tells its customers that their software can do everything, customer assume that to file their tax return, we just press a button and off it pops to HMRC. They believe that all the bookkeeping is correct because QB tells them so. It takes so much longer to unravel a mess and redo it then just start from scratch.
Honestly can't wait to see what QB comes up with for MTD.
We should all say this to the MTD readiness team....although they will be out shopping or having a wine and cheese lunch. They are a joke.
We should all say this to the MTD readiness team....although they will be out shopping or having a wine and cheese lunch. They are a joke.
There is an "MTD Readiness Team"?
Last year the extension saved our sanity, although coming too late to save most of it. The earlier announcement is welcome, although we've had a better year with 66% already filed and only 10% of clients yet to deliver their records. In any year this would be good for us, but the extension will save some weekends at any rate, and those last 10% won't annoy me quite so much.
Only tangentially on topic but HMRC are sending out emails with the subject "Your tax return is due" that are actually reminders about the payment deadline. Surely they could have left the word "return" out of the subject.
Quite.
But you're re-introducing the topic (as per a recent thread) of the seemingly random way in which HMRC - and even legislation - uses a word like 'return'.
Sometimes it's a verb (indicating submission of something but not always the channel/medium for so doing) ... and sometimes it's a noun (indicating a Form but not necessarily whether or not it has been completed).
They might claim that 'tax return is due' meant return of your tax (i.e. payment) is due ... but the reality is that they assume most people file the form and make the payment as a single action - as per the long gone days of putting both in a single brown envelope!
... and sometimes it's a noun (indicating a Form but not necessarily whether or not it has been completed).
I've always treated it as a proper noun rather than any old noun, and so will always use Tax Return.
Quite agree ... though I fear you may have flown a mile or two over the heads of any HMRC wordsmith who has got lost and is wandering amongst these threads.
HMRC being nice to agents and taxpayers.....gets me suspicious that there will be bad news to follow.
Like....no spreadsheets for MTD or PAYE for self employed.
Sorry to disagree with everyone, but I think it should have stayed at 31st January. Any clients bringing in paperwork in January should not be surprised to get a £100 penalty, it will concentrate their mind for future years.
The deadline is 31st January. It's only the penalty that has been waived and that is to do with Covid not if clients get their stuff in on time.
Let's look at the practicalities. Suddenly you have no office staff to do the work as they are isolating - come on, not rocket science.
That's buggered up my dry January. As for Harra's comments regarding a month's easement , he's probably thinking of the payback come MTD.
In HMRC's Covid notice that came out on 6/1/22, they said at the beginning: "Today HMRC has announced that we will not charge:
1. Late filing penalties for those who file online by 28/2/22."
However further down the notice (para 5 bulletpoint 2) "There is no change to the filing or payment deadline and other obligations are not affected. This means that;
- a return received online in February will be treated as a return received late where there is a valid reasonable excuse for lateness"
This seems to me to be "Double Dutch". A negative missing perhaps? and still a requirement for a reasonable excuse. Have I misread this statement?
It's awful grammar, but yes you've (not surprisingly) mis-read it.
A "return received late where there is a valid reasonable excuse for lateness" (in normal times) means that, although the deadline has been missed, the reasonable excuse will ensure no penalty being raised for the lateness.
So, they are saying that a "return received online in February" will be treated in the same way as if, in normal times, it had contained a 'reasonable excuse' value ... and therefore will not generate a penalty for late filing.
However, as others have pointed out, it will still actually be a late filing (with other potential consequences downstream) AND if the payment is also late (although paid in Feb) it will attract an interest charge.