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HMRC extends self-assessment window by a month


The UK’s HM Income & Customs has waived late submitting and fee penalties for self-assessment taxpayers by an extra month, to assist these battling pandemic pressures.

The choice comes as HMRC revealed that of the 12.2m taxpayers who must submit their tax return by January 31, simply 6.5m have already executed so.

“We all know the pressures people and companies are once more dealing with this 12 months, as a result of impacts of Covid-19,” mentioned Angela MacDonald, HMRC deputy chief government.

“Our determination to waive penalties for one month for self-assessment taxpayers will give them further time to fulfill their obligations with out worrying about receiving a penalty.”

Whereas the deadline to file and pay stays January 31, late penalties is not going to apply if a return is filed on-line by February 28. Late fee penalties is not going to apply if tax is paid by April 1.

The identical deadline applies for organising a Time to Pay association, which permits taxpayers to unfold £30,000 or much less over as many as 12 month-to-month instalments.

Nevertheless, the January 31 deadline applies for all different functions, mentioned Nimesh Shah, chief government at tax and advisory agency Blick Rothenberg.

“HMRC will nonetheless need the tax and any late paid quantities will entice day by day curiosity at 2.75 per cent and a 5 per cent surcharge if not paid by 1 April (which is a month greater than regular),” he warned.

He added that lacking the deadline may produce other impacts, comparable to extending the window HMRC has to boost an inquiry, and that sure claims and elections additionally need to be submitted by January 31.

It’s only the second time the federal government has taken such a transfer, following a choice final 12 months after lobbying by accountancy and tax professionals, who argued that they might wrestle to fulfill the deadline owing to the impression of Covid.

In a standard 12 months, a failure to submit a tax return on time triggers a £100 charge, with additional fees if the delay is three months or longer.

A file 1.8m individuals missed the January 31 deadline final 12 months after HMRC had introduced it was quickly waiving the charge, virtually double the 2020 complete.

A repeat was surprising because the disruption was extra restricted than in 2021, mentioned Shah. “HMRC could also be extra involved by the variety of returns which stay unfiled, and the stress to increase the timeframe because the deadline grew to become nearer.”

The transfer was welcomed by the Institute of Chartered Accountants in England and Wales. “We’ve been urging HMRC to offer self-assessment taxpayers and their brokers extra time, so we’re very happy with this determination which is able to assist individuals and tax brokers who’re coping with continued disruption brought on by Covid-19,” mentioned Frank Haskew, head of taxation technique at ICAEW.

“This might be an enormous reduction to these dealing with tax payments, alongside different family money owed in January,” added Daybreak Register, head of tax dispute decision at BDO, the UK’s fifth-largest accountant.

Beneath regular circumstances, taxpayers must enchantment to HMRC on the grounds of a “affordable excuse” for his or her delay, mentioned Register, a course of which is open to interpretation.

HMRC mentioned that greater than 45,000 tax returns had been filed throughout New Yr’s Eve and New Yr’s Day.

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