THE TRANSATLANTIC MAGAZINE
Although there have been rumors of an extension to the UK's traditional tax filing deadline of January 31, US/UK tax advisory firm Blick Rothenberg have warned that this is not the case, and that there could be financial penalties for individuals and businesses who don't file a return on time this year.
In a statement, Fiona Fernie, a tax dispute resolution partner at Blick Rothenberg, said that "Despite the rumours that have been circulating, the deadline for submitting self-assessment tax returns as NOT been extended beyond 31 January 2021. Taxpayers should therefore be doing their utmost to comply, not least to save the time and possible expense involved in appealing penalties for late submission."
Fernie added that "Some professional bodies have lobbied HMRC for an extension, while others have merely asked HMRC to waive late filing penalties in relation to returns filed before 1 March 2021, at this already difficult time ... The penalty for missing the filing deadline by less than 3 months is £100, which may not seem a great deal, but is an added pressure when people are struggling as a result of the pandemic. In addition, once a return is over 3 months late, the penalties rise quickly, with the next stage being the imposition of daily penalties of £10 (up to a maximum of £900)."
The firm says that HMRC's Chief Executive and First Permanent Secretary, Jim Harra, did recently write to professional tax firms, reporting that:
- "No-one will have to pay a penalty if they cannot file on time because of the impact of the pandemic."
- "HMRC will accept pandemic-related personal or business disruption as a reasonable excuse."
- "Pandemic-related delay on the part of an agent will also be a valid reasonable excuse."
- "HMRC are extending the penalty appeal period by three months.”
Although Fernie describes this is a positive development, she notes that "although Mr Harra has suggested that HMRC will be supportive, there are of course a number of reasons for taxpayers to ensure that their returns are submitted on time ... Not only do these include the possibility that HMRC will not consider that a particular delay was Covid related and therefore refuse to waive penalties, but there may also be circumstances where taxpayers cannot pay their full liability and need to ask for a time to pay (TTP) arrangement. This might be particularly pertinent for those whose July 2020 tax payments were postponed and become due this month in addition to the amounts that would now be due anyway."
Fernie went on to explain that "There are different avenues for seeking a TTP arrangement depending on the size of the outstanding tax bill, but whichever method is appropriate, HMRC will be less likely to be sympathetic if the return was filed late without an obvious and valid reason for the delay."
For more details on UK Tax Filing Requirements for January 31, 2021, go to www.gov.uk/government/organisations/hm-revenue-customs.