If you have been impacted by the coronavirus and unable to fill in your tax return, HMRC will waive fines for those who file their self-assessment tax return late.

 

The deadline has not been extended and will remain Sunday 31st January 2021. However, HMRC has said that it will accept COVID disruption as a reasonable excuse for missing the deadline.

Usually, taxpayers have to pay a £100 penalty even if there is not tax to pay.

If it’s delayed by three months, you may have to pay a penalty of £10 a day for a maximum of 90 days.

For payments late by six months, you’ll be fined 5% of the tax you owe or £300, whichever is greater.

This could rise even more if the delays are later than this – you can calculate how much your fine will be on the Gov.uk.

 

What constitutes a reasonable excuse?

This is the issue! It’s a bit vague. Is having to home school your kids a reasonable excuse? Getting COVID yourself? Having to pivot and work all the hours? We are not sure and HMRC will deal with it on a case by case basis.

 

You will have to appeal the fine

It is not a case of the fine being forgotten and ticking a box to say you were impacted by Coronavirus. The fines will be issued but you will be able to appeal them if you feel that COVID impacted your ability to submit a self-assessment return.

My advice? If you’re going to have to use time and energy to appeal, you may as well try and plough that time and energy into completing your tax return and getting it in on time.

 

Fines will not be waived if you are late paying your tax

This is the catch 22 here. So you can be late with your assessment, but if you have tax to pay and don’t pay that by Jan 31st, 2021, the fines stand. Unless you know you have no tax to pay for definite, you will need to complete your return to assess the tax that you owe. Catch 22, see?!

 

You can’t waive a fine in advance

 

You can’t call HMRC and tell them you’ll be late, ticking you off the naughty tax list. It doesn’t work like that.

You’ll need to prove to HMRC you’ve been negatively impacted by coronavirus and that it has caused a delay in making the deadline AFTER the deadline has passed.

According to newspaper reports, a HMRC spokesperson said: “We want to encourage as many people as possible to file on time even if they can’t pay their tax straight away, but where a customer is unable to do so because of the impact of COVID-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.

“Support is in place for those who may struggle to pay with customers able to spread their payment liabilities of up to £30,000 over 12 months.”

 

Spreading the cost of your tax

If you do want to enter into a payment plan with HMRC and spread the cost of your tax return payments over a 12 month period, click here.