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No relaxation of the 31 January SA filing deadline

5 January: In December, HMRC declined calls from professional bodies to relax the self assessment filing deadline but promised to keep the situation under review. Where HMRC issues penalty notices to those who file late, more time will be allowed to appeal and pandemic-related delay on the part of an agent may be accepted as a reasonable excuse.

Many members have contacted ICAEW in relation to the 31 January self assessment (SA) filing deadline and continue to do so - particularly following the latest lockdown announcements on 4 January.

With so much additional work this year helping clients make COVID-related claims for loans and grants, as well as suffering COVID related challenges from new working arrangements and health considerations of their own, agents are worried that they may struggle to meet the filing deadline for all their clients' tax returns.

Back in the autumn, ICAEW wrote to HMRC and working with other professional bodies, met to discuss whether it might be possible to put back the date from which late filing penalties would apply.

ICAEW’s Tax Faculty received a reply to this request on 18 December from Jim Harra, Chief Executive of HMRC, and the message it has been asked to convey is as follows:

“[HMRC] wants to encourage as many customers as possible to complete their returns by 31 January 2021, even if they can’t pay in full, because filing their return is key to crystallising their SA liability and being able to get our support, if they need it, to pay their tax.

“But no-one will have to pay a penalty if they cannot file on time because of the impact of the COVID-19 pandemic.

“We do not want to complicate this message by sending a blanket signal that it’s OK to file late. That could have some serious disadvantages for our customers; de-coupling the payment and filing dates might confuse customers, and even lead to non-payment, interest accruing, and late payment penalties being triggered. It would also encourage some customers to file late who really don’t need to.”

HMRC will accept pandemic-related personal or business disruption as a reasonable excuse. This does not normally apply where a taxpayer engages an agent, but HMRC has confirmed that If the taxpayer’s return is late due to pandemic-related delay on the part of an agent, this may be a valid reasonable excuse.

HMRC will also be giving taxpayers and agents more time by extending the penalty appeal period to three months.

HMRC committed to keep the situation under review. ICAEW will be raising the issue of late filing with the Prime Minister on 6 January.