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No late-filing penalties until March
To avoid being overwhelmed by penalty appeals from taxpayers, HMRC have said that they will not charge late-filing penalties for 2019/20 Self Assessment tax returns filed online on or before 28 February 2021. However, any tax due for the year is still payable by 31 January 2021.
Do I still need to pay my tax by 31 January 2021?
Yes. Any outstanding tax for 2019/20 remains due for payment by 31 January 2021. This includes any deferred payments on account which were originally due for payment on 31 July 2020.
You may also have to pay your first payment on account for 2020/21 on 31 January 2021.
If you are unable to pay, you can make a time-to-pay arrangement with HMRC to spread them across a longer period, but you must first submit your tax return. See our news article for more information on how to ask for time to pay.
What if I usually file my tax return on paper?
We understand that the relaxation only applies if you are filing your tax return online, because the usual paper filing deadline for 2019/20 has already passed.
Should I still try to file my return online by 31 January?
Yes. There are many reasons for this, including:
- You still need to calculate and pay the amount of tax (and, if self-employed, Class 2 and 4 National Insurance) due by 31 January 2021. You can then avoid interest and penalties being charged on any late-paid amounts. Interest will accrue from 1 February 2021 at 2.6%, and penalties apply 30 days after the due date.
- If you are not able to pay in full, you can make a time-to-pay arrangement with HMRC to spread the amounts you owe across a longer period, but you must submit your tax return first.
- If you claim tax credits, and you gave HMRC an estimated income before 31 July deadline, you still need to report your final/actual income figures for tax credits purposes by 31 January. However, HMRC have stated that “in most cases” they will update the income used to calculate the final entitlement to tax credits if the delay is due to the impact of coronavirus.
- If you need to claim a benefit which depends on having paid Class 2 National Insurance Contributions, you will need to ensure that the contributions are paid by 31 January as part of your Self Assessment balancing payment so that the claim is not affected.
- The statutory deadline for the online filing of the 2019/20 Self Assessment tax return remains 31 January 2021. If you file after this date but on or before 28 February, then it is still considered a late return – even if HMRC do not charge you a penalty. This means that HMRC have longer to enquire into your tax return after it is submitted.
- If you do not file your tax return by 31 January 2021 and you do not have a reasonable excuse for doing so, but you are then prevented from filing your return before 1 March 2021 because of circumstances which arise in February, you may not have grounds to appeal the late-filing penalty.
You should also be aware that daily penalties will begin to accrue once the tax return is three months late. We understand that, in general, for online returns these will apply from 1 April 2021 (that is, three months after 31 January 2021) and not 1 May 2021.
What if I cannot finish my tax return because of missing information?
If you are unable to finish your return because you cannot obtain certain information, such as a figure for bank interest, consider filing a return with estimated or provisional figures.
Provisional figures are those which you intend to update once you have final information. You are required to declare you have used provisional figures on the tax return and the enquiry window is extended. You should also explain when you will be able to give the final figure.
Estimated figures should be used when they are intended to be final, for example where records have been lost.
In either case, you should explain on the return why an estimated or provisional figure has been used and seek advice if you are unsure. You are expected to take reasonable care in completing your return and to make your best efforts to establish the actual figures before using provisional or estimated figures, otherwise penalties may apply.
What if I cannot file my tax return by 28 February?
You might have a problem which means you cannot file your tax return by 28 February. In this situation, HMRC will usually charge you a penalty for filing the return late.
However, if you have a reasonable excuse for being late, you might be able to appeal against the penalty. If, for example, you are in hospital and unable to file your return, you may be able to argue you have a reasonable excuse. HMRC have also stated that they will accept disruption caused by the pandemic as a reasonable excuse if this is the reason you have been unable file your tax return.
However, whatever the circumstances, they must exist prior to the legal due date for filing the return (that is, 31 January 2021 in most cases) and you must ensure that you file the return as soon as possible after the excuse has ended.
Where can I get more help?
We publish further information on Self Assessment here. If you need help understanding how to complete your return, please refer to our guidance relevant to your circumstances.
You can also find information on GOV.UK.
HMRC have confirmed that their helplines and webchat service will remain open on Saturday 30 January and Sunday 31 January.
Contact: Tom Henderson (click here to Contact Us)
(First published: 25/01/21)