HMRC has warned that self-assessment penalty notices for 2017/18 may not be issued until the end of April. The £100 penalties are normally issued in February.

The deadline for submitting a self-assessment tax return for 2017/18 was 31 January, and HMRC would normally already have issued penalty notices to taxpayers who have not filed on time. However, penalty notices create considerable demand for HMRC’s call centres and back offices as taxpayers contact them to discuss their options.

Anticipating increased demands on staff time as the Brexit deadline looms, HMRC announced a delay in late February to the issue of penalty notices this year. This will allow HMRC to release staff for EU exit related work.

HMRC’s regular monthly bulletin states that:

• Taxpayers who filed late will still be charged the £100 penalty, but the penalty notice will be delivered later than normal.
• The latest date that the notices will go out is the end of April, but will be issued sooner if an EU withdrawal agreement is agreed.
• HMRC will issue daily penalties to taxpayers who have still not filed three months after the 31 January deadline, with penalties being imposed from the normal deadline – that is, tax returns not received by 1 May 2019.

Given that penalty notices can take over a week to arrive by post, taxpayers could easily be subject to daily penalties before they even realise their return is late. A delay in notification until April could prove costly. Even though a taxpayer has ‘filed’ a return, there can be technical problems with online filing, with the result that an online return is held in suspension because the submit stage has failed.

Some 700,000 taxpayers missed the filing deadline for 2017/18. HMRC will treat those with genuine excuses leniently, as it focuses penalties on those who persistently fail to complete their tax returns, and deliberate tax evaders. However, the excuse must be genuine and HMRC may ask for evidence.

Please contact us if you think you might be affected.