Self-assessed individuals, such as freelancers and contractors, faced good news from HMRC recently as the infamous ‘late filing charge’ was dropped from cases involving late self-assessment returns – but only if such individuals could provide a ‘reasonable’ excuse for the late submission.
The £100 charge has long been used to incentivise self-assessed individuals to fulfil their tax duties by the January 31st deadline, but a leaked internal memo from HMRC revealed that staff are being urged to forego the charge without further investigation should the individual in question appeal with mitigating circumstances following the payment of their tax bill.
This change of heart from HMRC comes as staff face an estimated backlog of around a million letters from taxpayers – with about 90% of that number potentially benefiting. Previously, anyone who appealed would need to have their tax affairs thoroughly scrutinised for a number of weeks before even the slightest potential of reprieve. The process was quoted as being ‘lengthy’ and not entirely necessary, as most claims were accepted anyway.
There are some limitations to this new initiative, however: HMRC have provided a specific list of excuses it deems reasonable in these cases, involving circumstances such as unexpected hospital stays, the death of a partner or computer failure.
Some online sources are reporting that the change in policy is a chance for HMRC to focus on the issue of tax avoidance instead – an area widely reported on in recent years following missteps made by various multinationals and celebrities.
If your 2015 self-assessment missed the January 31st deadline and you have an excuse deemed reasonable by HMRC, be sure to submit your claim as soon as possible.