THE TRANSATLANTIC MAGAZINE
HMRC has confirmed that the UK's deadline for tax returns relating to the 2019/20 tax season has been delayed, from January 31 to February 28, 2021.
The extension was announced by HMRC's Chief Executive, Jim Harra, who explained that "We want to encourage as many people as possible to file their return on time, so we can calculate their tax bill and help them if they can’t pay it straight away ... But we recognise the immense pressure that many people are facing in these unprecedented times and it has become increasingly clear that some people will not be able to file their return by 31 January."
Last week, tax firm Blick Rothenberg, who specialize in US/UK tax, raised concerns over public rumors that the UK's tax deadline had been extended. Now that the extension has been confirmed, Blick Rothenberg's CEO Nimesh Shah said that "It’s amazing that HMRC have decided, with less than a week to go before people needed to file their tax return, to extend the deadline by a month. This decision should have been made much earlier and will have caused certain taxpayer groups significant concern."
Shah also added a word of caution to those planning on using the extended deadline. The "sting in the tail", Shah explains, "is that the 31 January deadline is important for all other purposes, including making your tax payment. Taxpayers will be left with a surprise in relation to interest and surcharges for late payment of tax if they wrongly believe the extension also applies to paying their tax. HMRC will still want the tax and any late paid amounts will attract daily interest at 2.6% and a 5% surcharge if not paid by 2 March."
Shah also reports that "even though the £100 late filing penalty will not apply, a tax return filed after 31 January is deemed to be ‘late’ for all other purposes – this can mean that the window HMRC has to raise an enquiry is automatically extended. There may also be certain claims and elections that need to be submitted by 31 January (usually done via the tax return), and taxpayers need to be clear on the wider implications of filing after 31 January – they may not receive a £100 late filing penalty but there could be other consequences in relation to their tax affairs."
Concluding his comments, Shah says that "I would still urge self-employed individuals to file their return by 31 January, as they risk being excluded from future Government support. The Government has not yet announced the eligibility criteria for the fourth SEISS grant, but I expect that HMRC will want the 2019/20 tax return data to make a valid claim."
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