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HM Revenue & Customs has confirmed that it will waive penalties for any tax returns filed after 31 January provided they are submitted by midnight of 2 February. There is a similar grace period for paying any tax which would also fall due on 31 January.
When the Public and Commercial Services Union (PCS) confirmed that the proposed strike action in HMRC call centres was definitely going ahead on 31 January, TaxationWeb contacted HMRC to ask them to publicise how they were intending to deal with the difficulties this would inevitably cause the many thousands of taxpayers who would need help to fill in their tax returns.
31 January is the deadline for filing tax returns and, based on previous years, HMRC expects around 600,000 tax returns will be submitted on the day - but also that about 90,000 calls will be made by taxpayers needing assistance with completing the forms.
It was feared that only 20% of those who telephoned a call centre during the period of industrial action would be able to get through and obtain assistance. There are automatic penalties for failing to file a return by the deadline and this year, for the first time, those penalties will stand even if there is no additional tax to pay or a tax refund is due.
Whilst HMRC had clearly already recognised that many people stood to be affected, and had made it clear that they did not want taxpayers to be disadvantaged by the forthcoming industrial action, before today the official position was that if a taxpayer were unable to file because he or she had not been able to get advice on 31 January, then they would have to appeal any penalty under the 'reasonable excuse' provisions, which would be dealt with on a 'case by case basis'. In other words, penalties would still be charged, a taxpayer would have to appeal against any penalty received and depending on the circumstances, the penalty would be cancelled. (See 31 January Filing Deadline and Possible Strikes: HMRC Insists "No Special Treatment" for Those Caught Out by Strikes).
However, HMRC has since changed its position, saying earlier today:
"Strike action by HMRC staff will mean that many people who want to file their SA return on 31 January and try to phone us with questions they need answered to do that will not be able to get through.
Because of this nobody who files online on 1 or 2 February this year will get a late filing penalty. "
Bearing in mind that taxpayers will generally need to complete their returns before being able to work out if they owe any further tax, HMRC has also confirmed that corresponding payments may also be made as late as 2 February, without incurring interest.
David Gauke, Exchequer Secretary to the Treasury, is reported to have said:
“This strike could have caused thousands of people to incur fines, so I am pleased that HMRC has taken this common sense approach. The Government does not want anyone trying to file their tax return on time to be unfairly penalised because they were unable to get through for help and advice on the 31st.”
That statement appears to suggest that the change in policy was within HMRC's gift rather than the Treasury's but this does not chime with TaxationWeb's discussions with HMRC representatives over the last few days. But whatever the means, the result is a boon to taxpayers and particularly welcome for those taxpayers who do not have agents to help them to complete their tax returns.
Whilst many taxpayers who are contending with Self Assessment and unable to get through to a call centre on 31 January may find the strike frustrating, it is perhaps worth asking what the PCS seeks to achieve by taking this industrial action. With that in mind, we have invited Mark Serwotka, general secretary of the Public and Commercial Services Union, to explain the PCS' position and hope to update readers in the next few days.
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