At a meeting with HMRC to discuss the recently announced 2020/21 self-assessment filing and payment easement, a number of related areas were discussed which HMRC has now provided more information on.
“1. Tax Credits
Customers are still encouraged to make their declarations by 31 January; if that is not possible tax credits will be finalised on the basis of the information HMRC holds at the time; if a declaration is made after that, and by 28 February, we will use discretionary powers to re-make the decision if the delay was due to Covid. We will not be expecting customers to prove the delay was due to Covid.
2. Class 2 NICs
Mandatory payment:
Self- employed taxpayers who need to claim certain contributory benefits soon after 31 January 2022 need to ensure their annual Class 2 National Insurance Contributions (NICs) are paid on time. This is to make sure their claims are unaffected. Class 2 NICs are included in the 2020/21 Balancing Payment that is due to be paid by 31 January 2022. Benefit entitlements may be affected if they:
- Can’t pay their Balancing Payment by 31 January 2022, and
- Enter into a Time to Pay arrangement to pay off the Balancing Payment and other Self-Assessment tax liabilities through instalments.
Affected taxpayers should contact HMRC on 0300 200 3822 for help as soon as possible.
Voluntary payment:
It is too late to make the necessary changes to the system. We will ensure that gov.uk is updated to advise customers of the issue and the action they need to take. We have prepared the message below for the Agent Update and will also post lines on the Agent Forum. Unfortunately, we are unable to directly contact affected customers before 31 January as we cannot identify them until they have filed and paid their return. Like last year we will also take steps to identify, and contact affected customers after 28 February.
Self-employed customers:-
- who have profits below £6,475 in the 2020/21 tax year and want to pay voluntary Class 2 NICs for Contributory Benefit after 31 January 2022; or
- paid voluntary Class 2 NICs via Self-Assessment before 31 January 2022 but will not file their return until after 31 January
will need to contact HMRC on 0300 200 3500 for assistance.
3. Does the payment easement also apply to SA700 / SA970 customers too?
Yes. The deadline for submitting and paying for these SA customers is 31/01/22. The LPP easement is based on a payment date of 31 January and not the type of SA return.
4. Daily late filing penalties reminders
Last year, due to a technical issue, we did not issue the usual daily late filing penalties reminders in June and July. We plan to issue the reminders this year. There is, of course, a warning about the daily penalties on the initial late filing penalty notice.
5. Can Covid be a reasonable excuse where there is agent delay and will HMRC provide guidance on that?
If a taxpayer has taken all reasonable steps to get their affairs in order to allow their agent to meet the filing deadline, and that agent has been delayed due to covid, then the agent delay may constitute a reasonable excuse.
HMRC is considering whether updates to guidance and other easements, such as the bulk appeals process, are needed as the situation develops.
6. Partnership returns SA800s
We can confirm that individual partners will not be charged a late filing penalty in respect of a 2020/21 partnership return (SA800) provided that the partnership return is filed online on or before 28 February.
7. Deadline for nominating accounts for the special mixed fund rules
We can confirm that for 2022, the deadline for nominations of special mixed funds has been moved to 28 February.”
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