People who missed the self assessment tax return deadline of 31st January have been let off the £100 fine, it has emerged. According to a memo leaked to the Daily Telegraph, due to a backlog in dealing with taxpayers' appeals, staff have been asked to write off the charge without further investigation for those who provide reasonable mitigating circumstances and up to 890,000 people could have been affected.
The memo is quoted as saying:
"Our penalty regime is intended to influence customer behaviour, but also be clear and cost-effective, fair and proportionate.
"The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty…
"This means that in the vast majority of cases we will be accepting the customer's grounds for appeal, and we can cancel the penalty."
A spokesman for HMRC has since said: "We want to focus more and more of our resources on investigating major tax avoidance and evasion rather than penalising ordinary people who are trying to do the right thing."
So does this mean tax returns can now be submitted late without worry of incurring a penalty? No. HMRC has always had a policy of considering waiving penalties where there is a reasonable excuse for being late, and their website gives a list of scenarios it considers to be reasonable. The only difference here is that in a bid to speed up the process which normally takes weeks to conclude, staff would accept a given excuse without further checks in the vast majority of cases if it appeared on the face of it to meet the 'reasonable' criteria. Furthermore, this reprieve only applies to the £100 late-filing penalty and has only been granted to those who have both already submitted their return and a subsequent appeal against the penalty and paid any outstanding tax. Anyone who is still to file a tax return or appeal will be subject to the penalty as usual and anyone owing tax after the 31st January deadline will still face interest charges on the overdue amounts.