HMRC – Coronavirus Reasonable Excuse

HMRC has announced that it will consider Covid as a potential reasonable excuse for failing to pay tax on time or to file your Tax Return on time, and thereby appeal against any penalty for lateness. The words in their announcement are:

“HMRC will consider coronavirus as a reasonable excuse for missing some tax obligations (such as payments or filing dates).

Explain how you were affected by coronavirus in your appeal. You must still make the return or payment as soon as you can.

The critical point to note here is that they will consider it and that you must explain how you were affected by Covid. This does not mean that you can assume that a late return will be excused, and you might expect that HMRC may challenge the information you give, so an appeal is not always successful. It is helpful if the circumstances fit and it is to be welcomed for those affected.

Our message is therefore that you should still do your best to provide the information to file your Return on time by 31 January. If you genuinely have had extenuating circumstances posed by Covid that prevent you from doing so, you need to set those out for us now so that we can advise you and hopefully estimate figures to submit to HMRC with an explanation now of why they are not final. That way, you will have filed the Return and then in consequence become eligible for ‘time-to-pay’ for the tax that is owed at 31 January. This eligibility is conditional on you having filed your Return.

Of course, you still must file the Return and pay any tax due as soon as you possibly can and HMRC will undoubtedly expect you to demonstrate that if your appeal is to be successful.