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Here are the concessions HMRC has made during COVID-19.
Tax Returns for the 2018/2019 year which are filed more than three months late will not be subject to daily penalties, however, all other filing penalties will be charged, unless you can show a reasonable excuse.
If the 2018/2019 Tax Return was not filed by 23rd April 2020 then you won’t have been eligible for the Self-Employment Income Support Scheme, regardless of any reasonable excuse.
The second installment of 2019/2020 payments on account due by 31st July 2020 can be deferred until 31st January 2021.
This is an automatic extension and does not need to be applied for. No penalties or interest will be applied.
These payments on account can also be paid off in monthly installments under a Time To Pay arrangement.
The installments are available over a period of up to 12 months, and for liabilities of £30,000 or under.
You still need to submit your Tax Returns by 31st January 2021. If the return is late then penalties will be applied. Appeals can be made if there is a reasonable excuse.
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From 20th March 2020 through to the 30th June 2020, any VAT payments can be deferred as long as payment is made by the 31st March 2021.
Time to pay arrangements can be made so you can pay monthly installments for up to 12 months, potentially delaying full payment to March 2022. These time to pay arrangements will not be available until early 2021.
The deadline for notifying HMRC of the VAT option to tax was extended to 90 days from 30 days, for decisions made between 15th February 2020 and 31st March 2020.
Companies House has given extended filing deadlines of three months for company accounts.
The confirmation statement deadline has been extended from 14 days to 42 days, as have the deadlines to file notifications of changes to companies.
Capital Gains Tax
From 6th April 2020, Capital Gains Tax (CGT) on all UK residential property sales must be reported, and a payment on account made within 30 days of completion.
HMRC has deferred the introduction of penalties for late filing until the 31st July 2020, so any transactions taking place on or before the 30th June 2020 will not be subject to late filing penalties.
However, interest will continue to accrue on late payments.
HMRC have reduced the late payment interest rate to 2.6% from the 7th April 2020. This applies to late payments of the main taxes, including Capital Gains Tax, Income Tax, National Insurance and Stamp Duty.
For companies in the Corporation Tax quarterly regime, the rate for underpayments of quarterly instalments is reduced to 1.25% from the 23rd March 2020.
The repayment interest rates remain unchanged, at 0.5% for the main taxes.
Normally you have 30 days to appeal any HMRC decision, but for HMRC decisions issued from 20th February 2020 onwards, you will be given a further three months to seek a review or make an appeal.
Where an appeal to tribunal is made late, HMRC will not oppose the appeal if submitted within the extended deadline.
HMRC have added COVID-19 to their guidance as an acceptable defence when seeking to rely upon reasonable excuse, however, you:
–must be able to show how the virus affected you and your ability to meet their responsibilities.
–must show how you remedied the situation as soon as you could.
This is not an automatic excuse, and HMRC will dismiss an appeal if there is no valid COVID-19 related excuse.
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