ICAEW.com works better with JavaScript enabled.

Reconsider stance on SA late-filing penalties, urges ICAEW

14 January 2021: ICAEW has called on HMRC to reconsider automatically waiving late-filing penalties for self assessment tax returns due on 31 January, in light of the significant impact of the COVID-19 pandemic on clients, tax agents and HMRC resources.

Michael Izza, Chief Executive of ICAEW, has written to Jim Harra, Chief Executive of HMRC, arguing that the effects of the latest lockdown and surge of coronavirus cases mean that HMRC should now consider waiving late-filing penalties for two months and extend helpline opening hours.

The letter sent on 14 January, is the latest in a series of communications with HMRC highlighting the mounting pressures on tax agents and their clients, urging for a temporary halt to late-filing penalties.

In November, ICAEW and other professional bodies, wrote to the HMRC suggesting a one-month waiver. 

Harra responded on 18 December stating that there would be no change in policy but offered reassurances on HMRC’s approach as to what constituted a “reasonable excuse” in appealing a penalty and that HMRC would “keep matters under review”. 

In his latest letter, Izza highlights the significant shift in the pandemic since Harra’s letter.

“Since you wrote, the closure of schools, more staff absence due to sickness and self-isolation, clients requiring assistance with CJRS claims for newly furloughed employees and continuing postal delays have significantly increased the resource constraints on those who at this time of year would be working hard to complete the filing of tax returns by the 31 January deadline.”

While he acknowledges that filing rates have been holding up thusfar, Izza argues that is likely to reflect the work done by agents in the final quarter of 2020 “rather than current pressures”.

Izza goes on to convey the concerns raised by ICAEW members that they are unable to reach HMRC due to the pandemic’s impact on HMRC's staff resources.

“HMRC’s helplines continue to operate with restricted opening hours, and agents’ priority access has still to be restored,” he writes. “We appreciate the staffing pressures HMRC is under, but members are finding it much harder to contact HMRC to resolve tax return related queries and we are hearing reports of members waiting for over half an hour to get through to HMRC.”

He suggests that, as the self assessment deadline falls on a Sunday, it would be helpful if HMRC could restore weekend opening, at least for the last two weekends of January.

While the letter welcomes the reassurances in Harra’s communication in December, it concludes that in view of the “deteriorating situation” a two-month waiver and additional helpline capacity were now needed and urged HMRC to make an announcement as soon as possible.