TT341: Self Assessment and Coronavirus

January 28, 2021

There has been intense speculation regarding HMRC’s attitude towards self-assessment filing, particularly with the background of the pandemic and how many individuals are going to be unable to meet the forthcoming 31st January deadline as a result of Coronavirus issues.

Up until this week, HMRC had been stonewalling the issue, taking the view that  there was no need to extend the forthcoming deadline, and reminding taxpayers that using its Time To Pay system is an option if tax payers have any difficulty regarding tax payment. It had repeatedly resisted calls to move the January filing deadline, indicating that taxpayers struggling to file returns should utilise estimates wherever possible (in effect giving themselves an extra twelve months in which to then file an accurate/final return) and to utilise the Time To Pay system to spread payments for up to 12 months.

The previous Time To Pay limit (available online, without the need to call HMRC) of £10,000 was increased to £30,000 on 1st October 2020. This is important because it extends the number of taxpayers whose arrangements can be agreed online, rather than having to phone HMRC to answer potentially intrusive questions about ability to pay etc.  https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments

To utilise the online self-service, the taxpayer must:

  • Be up to date with their tax affairs (including filing the 2019/20 return);
  • Not have any other payment plan or debts with HMRC
  • Set up the arrangement within 60 days of the payment deadline.

Interest continues to accrue on late paid self-assessment liabilities, currently at a rate of 2.6% per annum, calculated on a daily basis and tax payers with liabilities over £30,000, or who need longer than 12 months to pay, can call HMRC on 0300 200 3822 to discuss a conventional Time to Pay arrangement.

This week’s further announcement allows tax payers to file a return now by 28th February (instead of the 31st January deadline) but liabilities will continue to be payable as from 31st January, meaning that interest will accrue on any liabilities paid from 1st February onwards, notwithstanding that a physical tax return now does not have to be filed until 28th February.

Late filing penalties that would otherwise be payable for failing to meet the 31st of January deadline will now be waived, provided a return is submitted by 28th February.

Should you require any further information or indeed assistance in either filing a valid return by the revised deadline, or negotiating a Time to Pay arrangement, please contact your Barnes Roffe liaison Partner, or a member of our Personal Tax Teams.

 

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