HMRC: Vital payment update issued ahead of January 2021 Self Assessment deadline | Personal Finance | Finance

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Her Majesty’s Revenue and Customs (HMRC) is responsible for helping people to deal with their taxes, and ultimately collecting them. Perhaps the most important date in the tax calendar this year is January 31, 2021 – the deadline for filing a Self Assessment tax return. This system is used by HMRC to collect Income Tax, and is used by millions of Britons each year.

However, with the pressures of the ongoing COVID-19 pandemic, the Revenue has provided vital information on payment processes.

According to HMRC, if a person provides a “reasonable excuse” as to why they have been unable to file on time, and make efforts to do so soon afterwards, penalties will be waived. 

An HMRC spokesperson commented: “We want to encourage as many people as possible to file on time even if they can’t pay their tax straight away.

“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.

READ MORE: Self Assessment: Britons urged to avoid mistakes as deadline looms

He said: “It comes as little surprise that HMRC has announced a further dispensation due to the coronavirus.

“However, it’s important to note that people will still be fined for filing late Self Assessment tax returns, but will now have an opportunity to appeal if they have a ‘reasonable excuse’ as a result of pandemic-related personal or business disruption.

“With no clear guidance on what a ‘reasonable excuse’ may be – with HMRC simply stating that it will deal with each appeal on a case-by-case basis – the message is still very much to submit your tax return on time by the January 31 deadline.”

For those who are in this difficult bind, it appears to be important not to panic about the situation.

This is because there are a number of arrangements Britons may be able to come to with their tax, particularly due to the effect of COVID-19. 

Mr Parkes continued: “The tax authority is reportedly looking at ways to make the appeals process quicker and easier but, in the meantime, you will still receive a letter from HMRC about the fine, which will state how you can appeal within three months of the penalty date.

“If you cannot pay your Self Assessment tax bill, you might be able to set up a Time to Pay Arrangement with HMRC.

“This lets you spread the cost of your tax bill by paying what you owe through affordable monthly payments based on your income and expenditure.”

Under standard rules laid out by HMRC, if the January 31 deadline is missed, even if there is no tax payable, there is a £100 penalty to meet.

This will gradually increase the longer a tax bill is left unpaid, and so Britons are urged to take action quickly on the matter.

Taking into account HMRC’s new rules, people will have to receive the penalty first, and then appeal against this if filing late.

It is important to note, however, that each appeal is to be treated on a case by case basis. 

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