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COVID-19 deemed ‘reasonable excuse’ for late filing

12th January 2021

Self-employed taxpayers may be able to avoid being fined if they miss the deadline for tax returns as a result of the COVID-19 pandemic, HMRC has said.

The news comes as the deadline to submit returns approaches on 31 January 2021.

According to HMRC, pandemic-related personal or business disruption might constitute  a “reasonable excuse” for taxpayers who appeal late filing penalties. However, it is not a “blanket waiving” of penalties.

If taxpayers are unable to file their tax returns by the deadline, HMRC has recommended providing provisional figures, and later providing the actual figures as soon as possible.

In this case, taxpayers must tick the appropriate box to show provisional figures are being provided.

Usually, taxpayers would be issued with a £100 fine for the first day after the deadline and £10 for each additional day, capped at 90 days.

For payments late by six months, HMRC would usually fine taxpayers 5% of their tax owed or £300, whichever is the higher amount.

An 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.”

Speak to us about your tax returns.