⚠️ 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’

Updated on 19 October 2020

Coronavirus guidance

To help people through the coronavirus pandemic, HMRC have announced various changes in the way they deal with penalties. We outline these below.

Illustration of a man cowering in front of a tax penalty notice
(c) Shutterstock / VectorMine

Penalties for filing 2018/19 tax returns late – what changes have HMRC made?

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 issued automatically (such as a £100 initial penalty), but for others, HMRC must decide to charge you the penalty.

This is where there is some good news. HMRC have said that they will ‘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 is 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 is only the daily penalties that HMRC will 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 might agree to cancel penalties if you can show that you have been affected by coronavirus and this meant you had a ‘reasonable excuse’ for failing to meet a tax obligation.

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, from 1 February 2020, HMRC are allowing an extra three months to appeal, 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.

If HMRC do not cancel the penalty when you appeal to them, you can ask for them to review their decision again and/or you can appeal to an independent tribunal.

Will I still have to file my 2019/20 tax return on time?

Yes. HMRC have said that they ‘continue to require customers to file their returns where they are able to’.

You should therefore try to get your 2019/20 tax return done by the deadline.

The deadline is normally 31 October 2020 if you are doing it on paper, or 31 January 2020 for online returns. If HMRC sent you a notice to file a 2019/20 tax return after 1 September 2020, the submission deadline is different, as explained in our main guidance.

What if coronavirus or other problems mean I am late filing my 2019/20 tax return?

As above, you should still try to send in your tax return by the deadline.

But if, for example, you were to get ill in January and were unable to file your 2019/20 by 31 January 2021, you might have a reasonable excuse.

If this is the case, you must send the tax return in as soon as you can – that is, as soon as you are well enough to do so.

You should then appeal against any penalties saying why you could not make the deadline.

Where can I find out more?

Read our main guidance on tax penalties and tax appeals for more general information.

Coronavirus guidance: more information
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What is the Job Retention Scheme? Taking money from your pension
Employees: illness or self-isolation Help with paying your tax
Employees: work changes Information if you are a student or are repaying your student loan
Employees: universal credit and pay Accessing money in childcare schemes
Redundancy explained High Income Child Benefit Charge: What to do if your income falls?
Support for limited company directors School closures: family members might be able to claim state pension ‘babysitting’ credits
Self-Employment Income Support Scheme Childcare support and benefits for children
SEISS parental extension Inheritance tax exemption
Self-employment and paying tax Support for Carers
Self employment: Illness or self-isolation Carer’s allowance: can you claim?
Self-employment: work changes Volunteering and job opportunities
Help for businesses in Northern Ireland, Scotland and Wales Scams: please be vigilant!
Test and Trace Support payment Dealing with HMRC during the coronavirus outbreak

Tax penalties: coronavirus ‘relaxations’

Coronavirus guidance home page

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