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HMRC stands firm on SA late-filing penalties

19 January 2021: HMRC has rejected calls to reconsider automatically waiving late-filing penalties for self assessment tax returns due on 31 January, but confirmed that deadlines missed due to COVID-19 should not result in having to pay a penalty provided an appeal is made.

Following further calls from ICAEW and other professional bodies to waive late filing penalties in light of the tightening of restrictions and the increase in coronavirus cases, HMRC has reaffirmed that its position has not changed.

In a letter issued on 18 January, Jim Harra, HMRC CEO, confirmed: “We 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."

Harra did, however, acknowledge that some taxpayers and agents will struggle to meet the deadline and that HMRC continues to consider how to support those in this situation. He confirms that it is examining how it can “significantly simplify” the handling of reasonable excuse appeals, including ways to enable agents to appeal on behalf of multiple clients.

He also offered reassurance that those unable to file on time due to pandemic will not have to pay a penalty.

“We 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,” he wrote.

“I want to reiterate that no taxpayer or agent who is unable to submit a return by 31 January for reasons related to the pandemic should worry that a penalty will be payable; it won’t, and we will make the process of cancelling penalties as simple and easy as possible for all concerned.”

In addressing concerns that taxpayers and agents are unable to access HMRC support at this busy time due to restricted opening hours, Harra confirmed that the telephone helplines and webchat services will be opening for the weekend of the SA deadline (30 and 31 January).

ICAEW had urged HMRC to reinstate priority for the Agents Dedicated Line (ADL), which was removed at the start of the pandemic, and for support lines to be opened for two weekends ahead of the SA deadline.

In his response Harra argued that call handling performance on the ADL was “much improved” since April and May last year, with the majority of calls handled and customer services levels similar to HMRC’s other telephone lines. He did, however, pledge that HMRC would continue to monitor demand and its performance.

He also revealed that expected demand did not warrant the opening of telephone lines over the penultimate weekend.

HMRC telephone lines will be available 8:00 to 18:00 on 30 January and 9:00 to 18:00 on 31 January. Its webchat service will be available both days 8:00 to 20:00.