Tax Return Deadline Extended

Tax Return Deadline Extended

With days left before 31 January, HMRC’s chief executive Jim Harra has finally conceded that HMRC will extend the tax return deadline and will not charge late filing penalties for  online tax returns submitted by 28 February. He stated that this  will ‘give [taxpayers] the breathing space they need to complete and file their returns, without worrying about receiving a penalty’. That, of course, is the opposite of what he said earlier this month and, although the new move is welcome, it is a shame it was not announced before Christmas and saved everyone additional pressure in January.

Harra said HMRC can ‘reasonably assume most of these people will have a valid reason for filing late, caused by the pandemic’, although it is almost exactly the same number that were outstanding at this time last year. Maybe the thought of how HMRC would cope with appeals for the three million still outstanding tax returns concentrated the minds of HMRC!

He continued, ‘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’.

Reasons for still filing by 31 January

Although HMRC has progressively backed down on tax return late filing penalties over the past month, it is still pushing anyone who hasn’t filed yet to still do so by 31 January. The fact that the tax return deadline is extended does not affect the payment deadline, which means interest will be charged from 1 February on any outstanding liabilities if taxpayers don’t pay their bills by 31 January. And remember a 5% surcharge is levied on any tax outstanding on the 1st March so that is definitely to be avoided.

And we are not sure what the implication of filing after 31 January may be for future government support such as the Self Employed Income Support Scheme (SEISS) or other benefits.  Also, any implications for extending the investigation deadline are not clear so we would be wise to assume that this still applies if you file after January 31st.

So, no penalty because of the extension of the tax return deadline may not mean no adverse consequences. Our advice is that if you can file by the end of January, we encourage you to do so.