It’s not often that HMRC makes exceptions to its tax deadlines or late-filing penalties, but the past year has, as in so many ways, been different. With that in mind, we’ve summarised some of the tax compliance changes to be aware of this year to ensure that you are complying with your tax obligations.
Between optional deadline deferrals, new payment schemes and temporary reliefs, keeping on top of the changes to the usual tax timetable hasn’t been easy.
In total, HMRC has made more than 60 temporary policy changes or clarifications in response to the impact of COVID-19, and plans to “keep the situation under constant review”. As a general rule, however, we recommend sticking to your usual tax deadlines if you can so that you are complying with your tax obligations.
It might be tempting to push back your tax obligations and give yourself just a bit more time if the option’s there, but doing this can create more work for you in the long run, and lead to a bigger bill to cover in one go.
In a policy paper published in November 2020, HMRC’s approach to tax collection amid COVID-19 disruption was as follows: “We are issuing penalty notices to businesses and individuals who have not met their obligations, but we’ll take a sympathetic approach to those who are struggling to pay their tax or file their returns on time. “We will accept the impacts of COVID-19 as a reasonable excuse and offer longer periods to request a review or lodge an appeal.”
That might sound to some like a free pass to put any missed deadlines down to pandemic disruption, but in practice it means you’ll still need to fulfil your obligations at some point, as well as dealing with the review or appeals process.
It’s also worth noting that while HMRC might be lenient for now, it may not consider the matter closed in the future: “As time goes on, we would expect more customers to meet the deadlines and we will be looking more closely at the appeals where COVID-19 has been cited as a reasonable excuse.”
As always when it comes to tax, honesty is the best policy. If you are genuinely unable to meet a deadline as a result of COVID-19 disruption, you have the option to delay it – but be prepared to back up your decision should HMRC ask later on.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.