⚠️ We are working hard to ensure this guidance is up to date. However, you should bear in mind that things may change as the government respond to the ongoing situation.
Tax penalties: coronavirus ‘relaxations’
To help people through the coronavirus pandemic, HMRC announced some changes in the way they deal with penalties if you are late in filing your tax return or paying your tax. We outline these below.
What if I did not file my 2019/20 tax return on time?
The normal legal deadline for filing your 2019/20 tax return online was 31 January 2021.
If you file your tax return on paper, the normal deadline was 31 October 2020.
If HMRC sent you a notice to file a 2019/20 tax return after 1 September 2020, the submission deadline will be different, as explained in our main guidance.
However, on 25 January 2021 HMRC said that they would not charge late-filing penalties for 2019/20 returns submitted online on or before 28 February 2021. We covered this announcement in a separate news article. The purpose of the relaxation was to ensure that those who had a reasonable excuse not to file their return by the 31 January 2021 deadline because of the pandemic did not need to appeal the automatic £100 late-filing penalty which would otherwise be issued, provided they managed to get the return in by 28 February.
If you filed your 2019/20 tax return online after 28 February 2021 and have received a late-filing penalty, you might still be able to appeal it if you had a reasonable excuse for failing to meet the statutory deadline (usually 31 January 2021) and you filed the return as soon as possible after the excuse ended.
What if I am late paying my tax for 2019/20?
HMRC said that they would not charge this penalty provided that all the outstanding tax for 2019/20 was paid on or before 1 April 2021, or a payment plan for the outstanding tax had been arranged on or before that date. But if any tax for the 2019/20 tax year was still outstanding at 2 April 2021 and is not included in a Time to pay arrangement before that date, then a late payment penalty will be charged, based on this amount.
What if I did not file my 2018/19 tax return on time?
Self Assessment tax returns for the year to 5 April 2019, the 2018/19 tax year, were normally due to be filed by 31 January 2020 (if filing online; paper returns were due by 31 October 2019).
HMRC can charge you penalties if you are late filing your tax return – some of them are usually issued automatically (such as a £100 initial penalty), but for others, HMRC must decide to charge you the penalty.
HMRC said that they would ‘not charge individuals and businesses daily penalties where someone has been late in filing their 2018/19 Self Assessment Tax Return’. They say that ‘this [was] in recognition of the exceptionally difficult circumstances many taxpayers have faced due to the impact of the COVID-19 pandemic, during the period when the daily penalties accrued’.
However, other penalties will continue to apply – it was only the daily penalties that HMRC said they would not charge.
Can I appeal against penalties?
Yes. You can appeal against a decision made by HMRC, which includes a penalty they have sent you. Our main guidance (see link below) explains more about penalties and appeals.
Due to the pandemic, HMRC might be a bit more lenient with penalties than they normally would. They should agree to cancel penalties if you had a ‘reasonable excuse’ for failing to meet a tax obligation – for example, if you have been affected by coronavirus and you could not comply with this obligation as a result.
As noted on GOV.UK, you will need to ‘explain how you were affected by coronavirus in your appeal’.
Also, you normally only have 30 days to appeal an HMRC tax decision. However, since 1 February 2020, HMRC have been allowing an extra three months to appeal if you or your business has been affected by coronavirus, as explained on GOV.UK. It is not clear how long this extension will last, so you should aim to make any appeal as soon as you can.