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Three times as many people as last year face penalties for missing the January 31 deadline for filing their self-assessment tax return, as HM Revenue & Customs rebuffed calls for a reprieve for late filers.

About 2.5m people are likely to be fined a minimum of £100 for failing to file a tax return on time, according to research by the Association of Chartered Certified Accountants UK (ACCA UK), a professional body. This would be nearly triple the 958,300 who missed the deadline in 2020.

The ACCA surveyed accountancy practices representing around 14,000 clients during November and December and found about 22 per cent of individuals expected to miss the deadline.

It extrapolated these numbers across the 11.7m people required to file tax returns to estimate that around 2.5m people are likely to be fined — with the total bill hitting at least £250m.

Accountants have pointed to the extra difficulties facing self-employed individuals in the pandemic, who are working at full stretch to keep their businesses afloat.

“We would urge HMRC to reconsider and extend the deadline until the end of the tax year in order to provide relief for struggling businesses,” said Glenn Collins, head of technical advisory and policy at the ACCA.

The professional body is one of many lobbying for a relaxation to the self-assessment rules because of the impact the pandemic has had on taxpayers and accountancy firms as well as individual taxpayers.

The groups have been pressing HMRC for a delay to the deadline or a waiving of penalties. Late filing of tax returns attracts an initial £100 penalty and further fines, which mount over time.

So far, the tax authority has refused their demands. A letter sent by Jim Harra, HMRC chief executive, on Monday night — in response to renewed pleas for a relaxation of the rules — reiterated the tax office’s stance.

“Our position remains that we want to encourage as many people as possible to file on time, even if they can’t pay their tax straight away,” Mr Harra said in the letter, sent to accountancy and tax advisory bodies.

Mr Harra added he knew some taxpayers and their agents would “struggle to meet the deadline” but the tax office was looking at options that would “significantly simplify the handling of reasonable excuse appeals”. HMRC has previously said it will consider Covid-19 a reasonable excuse and treat penalty appeals sympathetically on a “case by case” basis. It has also given more people the option to pay their tax bill in monthly instalments.

“No taxpayer or agent who is unable to submit a return by January 31 for reasons related to the pandemic should worry that a penalty will be payable; it won’t, and we will make the process of cancelling penalties as simple and easy as possible for all concerned,” Mr Harra pledged.

Difficulties with working remotely, reduced capacity due to furloughed staff and home-schooling and increased mental health issues are making it harder for some self-employed individuals and their accountants to meet the deadline this year, professional bodies argue. Contacting HMRC is also proving a hurdle, the ACCA said.

HMRC’s latest performance figures, released this month, reveal a deterioration in the time the tax office was taking to respond to callers, with taxpayers waiting on the line for an average of 12 minutes 45 seconds in November, up from an average of 10 minutes 32 seconds between April and November.

Sarah Saunders, personal tax manager at RSM, an accountancy firm, said the statistics raised questions about HMRC’s capacity. “Given Covid-19, the level of appeals is likely to be much higher than usual. I can’t help wondering if HMRC itself can cope with the extra administrative burden this will create,” she said.

HMRC apologised for the waiting times and urged taxpayers to use its online services if possible.

“Like other service organisations, we have been impacted by the pandemic and we’re doing all we can to offer the best possible service to our customers, whether it’s supporting them with their taxes or delivering the government’s support schemes,” HMRC said.

It stressed taxpayers should continue to file their return on time and added it was keeping the self-assessment situation under review.

The new nationwide lockdown rules in England

  • The main restriction is a firm stay-at-home message

  • People are only allowed to leave their home to go to work if they cannot reasonably do so from home, to shop for essential food, medicines and other necessities and to exercise with their household or one other person — once a day and locally

  • The most clinically vulnerable have been asked to shield

  • All colleges and primary and secondary schools are closed until a review at half-term in mid-February. Vulnerable children and children of critical workers are still able to attend while nursery provision is available

  • University students have to study from home until at least mid-February

  • Hospitality and non-essential retail are closed. Takeaway services are available but not for the sale of alcohol

  • Entertainment venues and animal attractions such as zoos are closed. Playgrounds are open

  • Places of worship are open but one may attend only with one’s household

  • Indoor and outdoor sports facilities, including courts, gyms, golf courses, swimming pools and riding arenas, are closed. Elite sport, including the English Premier League, continues

  • Overseas travel is allowed for “essential” business only 

Full details are available on the government’s official website.

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