HMRC to waive fines for individuals who file late tax returns on account of coronavirus

How do I ask HMRC to waive any fines for filing late?

Unfortunately, there’s currently no way of getting out of a fine in advance, so if you’re affected by coronavirus you’ll need to appeal the penalty in order for it to be waived. However, in light of the coronavirus crisis, HMRC is currently looking at changes it could introduce to make the appeals process easier and quicker for taxpayers to use – so things may change in the coming weeks.

In the meantime the current rules still apply, where you’ll be charged a £100 penalty if you fail to submit your return by the deadline – even if there’s no tax to pay. Further penalties of £10 a day are applied after three months, up to a maximum of £900. After six months, you’ll get a further penalty of 5% of the tax owed or £300 (whichever is greater), which is repeated at 12 months.

If you are fined, HMRC will usually send you a letter telling you about the appeals process, and you will need to follow this – explaining why coronavirus meant you were unable to file on time – to overturn these fees. You get three months to appeal from the date the penalty is from.

Can I ask for fees to be waived if I pay my tax late?

If you were due to make an ‘on account’ (ie, advance) payment by 31 July 2020 – and not everyone has to – the Government gave you an extra six months to pay, but that runs out on 31 January 2021 unless you’ve agreed a separate repayment plan with HMRC. This payment is meant to cover roughly half of your 2019/20 bill and is calculated by using half of your actual bill for the 2018/19 tax year.

In addition, you need to pay any remaining tax owed from the 2019/20 tax year (known as a balancing payment) – unless you’ve also agreed a repayment plan – as well as make your first payment on account for the 2020/21 tax year.

Fail to make these payments, and you’ll be charged 5% of the unpaid tax after 30 days, six months and 12 months. HMRC has confirmed that late payment penalties will operate as normal as things stand, so you can’t ask for these fees to be waived if coronavirus means you’ll have problems repaying on time.  

You can, however, use HMRC’s “Time to Pay” arrangement to set-up a repayment plan. The online service has been changed to enable self-assessment balances of up to £30,000 to be paid in up to 12 instalments. 

You can set-up the repayment plan up to 60 days after the due date of the debt but bear in mind you will be charged interest of 2.6% a year from 1 February on any unpaid debt. You can find out more details in our self-assessment news story.

What else counts as a ‘reasonable excuse’ for filing or paying late? 

A reasonable excuse for not filing or making tax payments on time is usually something unexpected or outside of your control. For example:

  • Your partner or another close relative died shortly before the tax return or payment deadline
  • You had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • You had a serious or life-threatening illness
  • Your computer or software failed just before or while you were preparing your online return
  • Issues with HMRC’s online services
  • A fire, flood or theft prevented you from completing your tax return
  • HMRC online service issues 
  • Postal delays that you could not have predicted
  • Delays related to a disability you have

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