Welcome relief as late-filing penalties waived until March  

The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) have welcomed today’s announcement from HMRC that self-assessment late-filing penalties will be waived for returns filed before 1 March.

The deadline for 2019-20 self-assessment returns is 31 January 2021. Normally, a return filed after this date would attract an automatic £100 late-filing penalty.1 HMRC have today (25 January) announced that they will waive this penalty – provided that returns are filed electronically on or before 28 February 2021.

The change mirrors the request from the CIOT and ATT, and similar requests from other bodies, for leniency given the difficulties faced by agents and taxpayers as a result of the pandemic.2 These problems were enhanced when the latest lockdown was introduced this month. While HMRC had always said that taxpayers issued with late-filing penalties would have their penalties quashed where they had been unable to file on time due to coronavirus, appealing penalties would have meant more work for agents, taxpayers and HMRC.

John Barnett, Chair of the CIOT’s Technical Policy and Oversight Committee, said: 

“We are pleased that HMRC are implementing our recommendation not to issue late-filing penalties for self-assessments returns filed before 1 March 2021, but it remains important that anyone who can file their return on time by 31 January 2021 does so. This is a relaxation on the first late-filing penalty only. Taxpayers are still expected to pay their tax by 31 January 2021, even if only an estimated figure, to avoid interest accruing.”

Jon Stride, Co-chair of ATT’s Technical Steering Group, said:

“We welcome HMRC’s change of heart as it takes some of the pressure off taxpayers, their agents and HMRC at this difficult time. However, it is still important to file on time if possible and taxpayers should ensure their agent has all the required information to file the return promptly and pay the tax due.

“It is even more important to get the return in as soon as possible where a taxpayer is struggling to pay. HMRC’s enhanced Time to Pay arrangements3 which will allow taxpayers to spread their bills over the next 12 months are only available to taxpayers who have filed their tax returns.

“Taxpayers within the tax credits system should make a particular effort to file on time if they have not reported their final income figures to the Tax Credits Office as that deadline remains 31 January 2021.”

Notes for editors

 

  1. There are a range of penalties depending how late the return is. Returns filed late are usually charged an automatic £100 penalty. Once the return is more than three months, daily penalties of £10/day can be issued for up to 90 days. Once the return is over six-months late the penalties rise to the higher of £300 or five per cent of the tax due.
  2. The CIOT, ATT and others originally wrote to HMRC on 11 November raising concerns about the ability of taxpayers and agents to meet the approaching deadline and followed this up in January. HMRC’s replies can be found here.
  3. The ATT highlighted the enhanced Time to Pay arrangements in December.
  4. The Chartered Institute of Taxation

The CIOT is the leading professional body in the UK for advisers dealing with all aspects of taxation. We are a charity and our primary purpose is to promote education in taxation with a key aim of achieving a more efficient and less complex tax system for all. We draw on the experience of our 19,000 members, and extensive volunteer network, in providing our response.

The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. Our comments and recommendations on tax issues are made solely in order to achieve this aim; we are a non-party-political organisation.

The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries.

Our members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

 

  1. The Association of Taxation Technicians

The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members’ practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible.

Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.

The Association has over 9,000 members and Fellows together with over 5,000 students. Members and Fellows use the practising title of ‘Taxation Technician’ or ‘Taxation Technician (Fellow)’ and the designatory letters ‘ATT’ and ‘ATT (Fellow)’ respectively.