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HMRC waives penalty for late filing of tax self assessment


An announcement this week from HMRC will give some welcome relief to taxpayers who are struggling to complete their self-assessment tax returns before the normal deadline of 31st January.


HMRC said that it would waive the automatic £100 fine that would usually be imposed for self-assessments that miss the deadline, provided that they are filed online by 28th February. The fine is usually followed by further penalties if the delay extends to three months or more.


It is the first time in the history of self-assessment that late-filing penalties have been waived.


HMRC noted that nearly nine million customers had already filed their tax returns, but a small number were encountering difficulty doing so for a variety of reasons, many of which were associated with the COVID-19 pandemic and the restrictions that have been imposed as a result of that.


The change has been generated following a campaign by the accountancy and tax professional bodies, which have argued that advisers and taxpayers would struggle to meet the deadline this year because of the effects of COVID-19.


The extension does not, however, apply to tax bills, which will still need to be paid by 31st January. Interest will be charged from 1st February on any outstanding liabilities. Customers can pay online, or through their bank, or by post before they file.


HMRC said that people who found themselves, for whatever reason, unable to pay their tax bill could make an application to spread their liabilities over a period of up to 12 months, providing the bill was not more than £30,000. This is known as a Time to Pay arrangement. However, in order to do so, they would first have to file their 2019-2020 tax return.


rradar tax advisor Caroline Lamyman said “It is hoped that this extension will help those people struggling under the immense pressure in these unprecedented times. Not charging late filing penalties for late online tax returns submitted in February will give people the opportunity to complete and file their returns, without worrying about receiving a penalty.”

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