HMRC to take it easy on late filers of paper SA returns this year

Instead of issuing automatic late filing penalties, HMRC are to allow taxpayers to submit a "reasonable excuse" for submitting their paper self-assessment tax returns on time this year.

This unusually tolerant measure will potentially benefit those unable to file online after the 31st October deadline for paper filing and who thus have to send in a late paper tax return.

Instead of being landed with an automatic late filing penalty, where they have a 'reasonable excuse' for being late with their return (perhaps because of a software failure), taxpayers or their tax adviser can submit a 'reasonable excuse claim' with their tax return.

Until this point, self assessment taxpayers had to claim a reasonable excuse after HMRC issued a late filing penalty. The advance claim procedure will enable HMRC to suppress many penalty notices and save time. The CIOT has welcomed the change.

Tina Riches, CIOT Technical Director, said: “The CIOT have worked with HMRC to ensure a smooth process for tax advisers, the taxpayer and HMRC. We are very pleased that they have taken the time to consult with the professional bodies and understood the problems in this transitional year. The outcome is a positive result for all concerned.”

Individuals can avoid late filing penalties by paying their tax on time. However, without a valid claim for reasonable excuse, late partnership tax returns and returns of individuals who have not paid all their tax on time can attract a penalty of up to £100 per partner or individual.

The one-page form will, if HMRC accept it, mean that no penalty notice is issued.