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HMRC told to waive fines for late tax returns

·2-min read
A pedestrian walks past the headquarters of Her Majesty's Revenue and Customs (HMRC) in central London February 13, 2015. British lawmakers plan to call up the bosses of HSBC and the tax authority, HMRC, to quiz them over allegations some clients of HSBC's Swiss private bank evaded tax.     REUTERS/Stefan Wermuth (BRITAIN - Tags: BUSINESS POLITICS CRIME LAW)
Campaigners have called for more help and are in discussions with the tax authority. Photo: Reuters/Stefan Wermuth

HM Revenue & Customs (HMRC) has been told to waive fines for tax returns sent after the pending deadline in order to ease the burden on small businesses and freelancers struggling to stay afloat in the current crisis.

Campaigners have argued that a third national lockdown “changed the playing field” and piled further pressure on small companies, the Telegraph reported. They have called for more help and are in discussions with the tax authority.

HMRC said it was considering how to ease the burden but ruled out an official extension to the filing deadline of 31 January. Late filing can lead to a fine of at least £100 ($136).

Before Christmas, HMRC said it would accept the current health crisis as a reasonable excuse for missing the deadline and would cancel penalties for genuinely affected taxpayers if they appealed. It has also extended the window for appeal to three months.

Richard Wild of the Chartered Institute of Taxation told the newspaper: “We have asked HMRC to waive late filing penalties for all returns filed before 1 March 2021 in order to avoid adding further costs or compliance burdens at an already difficult time."

“The new lockdown and increased incidence of the coronavirus has added to the challenges facing many taxpayers and has changed the playing field,” he said.

Around 55% of self assessment customers have already filed their return, however, more than a million missed the deadline last year. HMRC expects 12.1 million tax returns to be filed this year.

Those who are yet to file a return are being urged to act now, as it may be a more time-consuming process than anticipated.

READ MORE: Top tips on sorting out your tax before end of January 2021

Karl Khan, HMRC’s interim director general for customer services, said: “In what was a very difficult year for many, we are grateful to the 55% of our customers who have already submitted their returns.

“HMRC is ready to offer support to those who are yet to file their returns or are worried about paying their tax bill, but they must act now so we can help before the deadline.”

Once customers 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.

Yahoo Finance has reached out to HMRC for comment.

Watch: Why tax rises may be inevitable in Britain?

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