No ‘get out of jail free’ card over self-assessment

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Last weekend, it was announced that HMRC has waived the automatic fine for missing the self-assessment deadline for hundreds of thousands of taxpayers.

Up to 890,000 people have been involved in the amnesty, which has seen the £100 penalty wiped off without investigation. This is provided they were able to provide a “reasonable” excuse as to why their tax return was not submitted on time.

The unusual move comes as the Revenue struggles to deal with an administrative backlog, which has seen front line staff withdrawn from telephone helplines in a bid to tackle the problem. A leaked memo said that HMRC is willing to write off the “vast majority” of penalties as long as those concerned have subsequently settled their tax bill.

While the news will undoubtedly have pleased some taxpayers, it is essential not to underestimate the importance of sticking to the deadline. Failure to do so can still attract harsh fines if you are unable to provide any good reason for not submitting the tax return on time. If you choose to appeal, you must do so within 30 days of receiving a penalty notice from HMRC.

Those involved in the amnesty successfully argued they had a reasonable excuse for filing late. This is defined as “something unexpected or outside your control”, and includes incidents such as the death of a partner, an unexpected stay in hospital or postal delays. What’s more, pardoned taxpayers were also able to settle up with HMRC promptly.

Richard Murray, ClearSky’s head of operations, said: “It is essential that taxpayers don’t get lulled into a false sense of security and think they can miss the reporting deadline with no consequence. HMRC is coming down hard on tax avoiders and will impose punitive fines on those who file their returns late without good reason.

“Even if you are able to prove you have ‘reasonable excuse’ you’ll still have to settle up sooner or later. It’s therefore a good idea to get all your affairs in order up front and on time to prevent any hassle further down the line.”

Have your say

What do you think? Is HMRC right to cancel the penalties? Does this set the right example? What would you do to tackle tax avoidance? Join in the discussion on Twitter, or leave a comment below.

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