Tax Planning

Fines for many late tax returns to be waived by HMRC due to pandemic

· 3 min read

The deadline for tax returns is 31st January, but swathes of taxpayers may find themselves in a position where they cannot file their returns on time. This may be for various COVID-related issues, including home schooling their children due to school closures. HMRC officials have said there will be leniency for those unable to file on time due to reasons such as this. 


The deadline for tax returns is 31st January, but swathes of taxpayers may find themselves in a position where they cannot file their returns on time. This may be for various COVID-related issues, including home schooling their children due to school closures. HMRC officials have said there will be leniency for those unable to file on time due to reasons such as this. 

Relief to many taxpayers

This measure, which was recently confirmed by the tax office, will provide relief to many taxpayers who have been affected by the ongoing COVID situation. Penalties for not filing returns on time are often crippling, but HMRC has acknowledged that in this unprecedented situation, many people could find themselves in a position where they are unable to file their returns before the deadline.

In addition to those home schooling, HMRC will show leniency to those who have been unwell with the virus. In addition, those who use an accountant will also avoid fines if their accountant has been ill with COVID-19 and, therefore, unable to file the return on time. However, late filers will need to prove that the delay is due to COVID to avoid the fines. 

A reasonable excuse

A spokesperson from HMRC recently said that all taxpayers were encouraged to file their returns on time in the usual way. However, he also acknowledged that due to the COVID situation, this might not be possible for many. 

In a recent statement, HMRC said that taxpayers should try to send their returns by the deadline even if they could not settle the tax bill by the given date. However, they added, “But where a customer is unable to do so because of the impact of Covid-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.”

The tax office and the Chancellor, Rishi Sunak, have also been exercising greater flexibility for those who cannot pay their tax bill on time. Usually, those who do not pay their tax in full by the deadline are hit with fines. However, people who cannot afford the payment in one go can set up an instalment arrangement via the HMRC website. 

Millions were also allowed to defer their payments from July 2020 to January 2021 due to the impact of the first wave of Covid. This means that many could soon be due to make payment for July 2020 and January 2021, which could be unmanageable due to the second wave of the pandemic. 

Possible extension of deadline

According to figures, around 12 million people in Britain must file tax returns each year. HRMC said that over 50% have already filed their returns for the 2019/20 financial year. However, many of those who have not yet filed theirs may be in a position where they will end up sending their return after the deadline has passed.

What to read next...

Given the situation, the chancellor is considering a blanket extension of the deadline from the end of January to the end of March. According to tax experts, this move could provide peace of mind for taxpayers. It could also mean that HMRC avoids being flooded with queries and calls as the 31st January deadline approaches.

Reno Charlton
Reno Charlton
Reno Charlton has been writing since 2003. She has worked with a diverse client base around the world, across a variety of subjects and industry areas, specialising in lifestyle and health & wellbeing niches. In addition to her online work, Reno is also a published author and has written several children's books and short stories.
The content on pensiontimes.co.uk is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial advisor. Any references to products, offers, rates and services from third parties advertised are served by those third parties and are subject to change. We may have financial relationships with some of the companies mentioned on this website. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors