Thousands of people may believe that the date for filing tax returns has been extended, and as a result could face fines and other penalties, say leading tax and advisory firm, Blick Rothenberg. Despite the rumours that have been circulating, the deadline for submitting self-assessment tax returns has 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. It appears to be a popular misconception that the deadline has been extended but that is not the case. 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. So far, HMRC have not agreed to waive late filing penalties but Jim Harra, HMRC’s Chief Executive and First Permanent Secretary has written to professional bodies confirming 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.

This is positive news, but 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-19 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.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of January 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.