HMRC Rejects calls to extend the January 2021 Tax Return Deadline

HMRC will not waive late filing penalties or extend the 31 January 2021 deadline. However, they will accept Coronavirus pandemic related disruptions as a reasonable excuse and will also extend the period to appeal a penalty.

Submit your tax return even if you can't pay in full

HMRC’s chief executive Jim Harra said the proposal to waive late filing penalties for a short period after 31 January would “complicate” HMRC’s self assessment message and would “send a blanket signal that it is OK to file late”.

Harra explained that this could have some “serious disadvantages” for taxpayers. “De-coupling the payment and filing dates might confuse customers, and even lead to non-payment, interest accruing, and late payments being triggered.”

He added that it would also encourage some taxpayers to take advantage of the extension to file late when they don’t need to.

Instead, HMRC wants as many taxpayers as possible to complete their returns by the self assessment deadline (Midnight January 31st 2021), “even if they can’t pay in full”.

Harra explained that “filing their return is key to crystallising their SA liability and being able to get our support, if they need it, to pay their tax”.

No penalties for late filing caused by Covid delays

However, HMRC have acknowledged some taxpayers and agents will not be able to file on time due to the impact of the current pandemic.

The HMRC chief executive said that these taxpayers should get their returns in as soon as they can but they will not be penalised if they need more time.

Accounting World reports that "While HMRC will not issue a blanket waiver of late filing penalties, it will accept pandemic-related disruption caused to the taxpayer’s business or their personal circumstances as a reasonable excuse. The same applies when agents are delayed in filing a return due to the pandemic and this will also be treated as a valid reasonable excuse".

Extend late filing appeal

These taxpayers will receive a penalty notice, but Harra said that those affected or their agent can get the late filing penalties “cancelled easily” by contacting HMRC.

HMRC will extend the appeal period from one to three months to give taxpayers and agents more time.