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HMRC to accept Covid as excuse for late returns

HMRC to accept Covid as excuse for late returns

Individuals who struggle to file their self assessment return by the deadline due to difficulties caused by Covid-19 will be able to use this as a ‘reasonable excuse’, the tax authority has said.

According to HM Revenue and Customs, if a taxpayer has a genuine reason as to why they could not file their tax return by the January 31 deadline due to Covid, they can appeal a late filing penalty.

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.”

The tax authority will accept Covid as an excuse, as long as an individual is able to explain how they were affected in their grounds for appeal and submit the return as soon as they can. 

However, HMRC stressed that each appeal will be treated on a case by case basis.

The tax authority has already extended the penalty appeal period to three months and is also looking to make appeals easier and quicker.

Figures published by HMRC earlier this month showed it had received 6.6m tax returns as of January 4, out of a total 12.1m returns due to be filed.

The majority of these returns (93 per cent) were submitted online, with only 450,000 returns filed on paper (7 per cent).

If taxpayers struggle to obtain the required information in time, they can use provisional figures on their return and then provide HMRC with the actual figures as soon as they can.

Once individuals have completed their tax return, and know how much tax is owed, they can set up their own payment plan to help spread the cost of their tax liabilities, up to the value of £30,000. 

But some in the industry have called on the tax authority to extend the filing deadline by at least one month but even by as much as eight weeks to give people more time to file.

amy.austin@ft.com

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