Covid judged as a “reasonable excuse” for late filing of the self-assessment tax return

In 2018/19, out of 11.1 million individuals who are required to file tax returns, almost a million (958,296 to be precise) missed the deadline to file their tax returns. Failing to file tax returns can lead to late filing penalties, and therefore each taxpayer should ensure they file their return on time unless they have a ‘reasonable excuse’.

Covid judged as a “reasonable excuse” for late filing of the self-assessment tax return

Due to Covid-19, many taxpayers may face difficulties accumulating the information necessary to prepare and file self-assessment tax returns. As per the recent update from HMRC, tax payers unable to file their self-assessment tax returns before the deadline of 31 January 2021 due to Covid could write an appeal to HMRC to waive off late filing penalties. ‘Covid’ will now be accepted as a reasonable excuse for late filing of the self-assessment tax return as long as the taxpayer can explain how they are affected in their grounds for appeal and can submit the returns as soon as possible.

In this article we cover:

Cancellation of penalties

Tax authority stated that any disruption, either personal or business, caused to any taxpayer or their agent due to pandemic, will now be constituted as a reasonable excuse.

As per the new figures published by HMRC in the start of the month of January, 11 million taxpayers have already filed their self-assessment tax return forms, and at least 5 million more are expected to be filed till the end of this month.

HMRC also said that they want to encourage as many taxpayers as possible to come forward and file their self-assessment tax returns. If they cannot pay their taxes straight away, atleast pay it on time. Still, if you cannot do so because of Covid-19, HMRC will accept this as a reasonable excuse and cancel the penalties.

HMRC’s enhancement to “Time to pay” arrangements

HMRC said that they want to support taxpayers and recently enhanced their “Time to pay” arrangements for those struggling to pay their taxes, could pay their payment liabilities of up to £30,000 over the extended period of 12 months.

HMRC’s enhancement to “Time to Pay” arrangements will benefit many taxpayers who have already filed their tax returns and determined the due taxes for 2019/20 and advance payment on account for 2020/21 can easily make the payments over an extended period. With the help of self-serve automated“Time to Pay”online service, a taxpayer can easily set up their instalment arrangement online instead of contacting HMRC beforehand. However, this online service can only be applicable after filing self-assessment tax returns.

Also See: Tax Rates and Allowances for 2020/21

Not having exact information, reveal provisional figures

HMRC stated that if taxpayers or their agents are unable to obtain the exact information for their self-assessment tax returns before the filing deadline of 31 January, they can provide us with provisional figures and reveal the actual figures as soon as they can. They also stated that the taxpayers who will provide the provisional figures must tick the appropriate data item box while filing their tax return. Even a penalty appeal period has also been extended to three months so that taxpayers have enough time to appeal against their penalties.

DNS offers a comprehensive preparation of Self-Assessment Tax Returns. Using our service, you can be assured of one thing – there will be no mistakes on your tax return, it will never happen, which means you will never be bothered by HMRC.

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About the author
Blog Author

Siddharth Agarwal
I am currently pursuing to become a chartered tax advisor and joined DNS in 2014. With more than 7 years of experience in advising owner managed businesses, I deal with a wide spectrum of tax issues, both for company and personal tax. My expertise cover owner managed business taxation issues, company re-organisations, property taxation and succession planning.


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