Millions of self employed taxpayers are required to submit their 2019-20 self assessment tax return by midnight on 31st January 2021. As are other British taxpayers with particular income streams. One accountancy firm, Moore, is asking Chancellor Rishi Sunak to alleviate some of this stress by extending the SA deadline.
Why is this year different to any other?
People have been able to submit their 2019-20 tax return since April 6th 2020. And the information for that year will, largely, not have changed.
So why does anyone need an extension? Basically, because of the COVID-19 pandemic there are other issues to consider, particularly in terms of actions taken during the first lockdown. This makes everyone’s tax situation more complicated than usual. The financial effects of COVID-19 restrictions began before the tax year ended.
And there are additional factors, such as:
- How to report any government support you received.
- Getting hard copies of essential paperwork from banks, businesses or even your own office.
- Being able to speak to your accountant or tax professional. Many were furloughed and are therefore behind with their entire workload.
- Difficulty getting advice from HMRC, as they adapted to their new roles, they needed to reduce the opening hours of all their helplines.
- Working at reduced capacity yourself because of illness or shielding.
What would extending the tax return deadline solve?
Missing any HMRC deadline incurs a financial penalty. The minimum amount for missing the self assessment tax return deadline is £100. There are additional penalties after three months, which only stop growing when you submit your late tax return. There are also fines for missing the tax bill payment deadline and you’re charged interest on these late payments.
As well as these fines, you can also get penalised for making mistakes on your self assessment tax return form. Even if they’re just genuine errors.
Knowing all of this is part of the system is extremely stressful and is huge extra pressure on people trying to get their tax affairs in order.
Associate at Moore, Time Woodgates, told The Express: “Announcing the extension to the deadline now is essential to avoid causing more anxiety and stress over the coming months to those who are shielding.
“A blanket extension is the best option as HMRC is snowed under and just won’t have enough time to deal with appeals against penalties without falling behind elsewhere.
“Compared to overall tax take, the penalties for late filing are immaterial. The second lockdown has caused extra problems for those taxpayers that are shielding at what has been an extremely hard year for them. I am sure HMRC understands that.”
As with many things, all the financial support systems we may have in place are currently disrupted and much slower. You need to allow longer for understaffed institutions to produce important documents. If you’re shielding, you need to rely on others to deliver to your door. If you need your tax professional’s or accountant’s advice, you need to wait longer for a phone appointment. And if your usual, trusted person is now furloughed, you need to find somebody else in – what is now – a bit of a last minute situation.
Despite HMRC’s commitment to Making Tax Digital and the success of online filing, done by individual taxpayers, there are some situations that need official advice. Particularly when those making a mistake fines are hovering over your head. And everybody would rather check they’ve understood any new situations, schemes and rules before submitting any official paperwork.
It may also be in HMRC’s own best interest to extend the self assessment deadline by a month. There’s a good chance that it’ll save them time issuing fines and then processing the appeals against those fines. It also spreads out the arrival of millions of digital forms all at the same time, which eases the strain of this particularly high workload.
What should I do if I receive a tax return late penalty?
At this present moment, we should all assume that it’s 11.59 on 31st January. Then, if a deadline extension is announced, it’s a bonus bit of extra time. But you’re not getting yourself an automatic fine by relying on it.
If you have a reasonable excuse penalties can be cancelled if you do submit your tax return after the deadline. You would need to write to HMRC explaining the reason(s) behind why you couldn’t complete your tax return on time.
If you’ve got any questions about your self assessment tax return, HMRC have dedicated staff that just work on self assessment issues. You can also give us a call and we’ll do our best to help you.
