HMRC have just announced that where 2020 tax returns are filed before the end of February 2021, no £100 late filing penalty will be charged.
There has been significant pressure for HMRC to offer some concession. Given the number of appeals they would be likely to receive, and the time and cost of processing all of these individually, this is a pragmatic step. It is also likely to be welcome news to tax advisers who have found that their own work or availability has been impacted, whether by illness, changed family arrangements, or time spent assisting clients with information on furlough arrangements or the SEISS grants.
Where any taxpayer’s return is delayed beyond the end of February for personal reasons – whether related to the pandemic or not – it will still be possible to appeal a late penalty in the usual way, asking HMRC to consider the circumstances.
Late-paid tax is still subject to interest – the current rate is 2.6% per annum. Any tax outstanding after the end of February attracts a 5% surcharge, although the surcharge does not apply where an instalment arrangement has already been agreed with HMRC.