In the wake of reports about 2 million taxpayers struggling to file their tax return by tomorrow, the Association of Chartered Certified Accountants (ACCA) has called on HMRC to postpone the 31 January deadline.
The reason for ACCA calling upon HMRC to “do the right thing” is mainly due to changes in child benefits and a spurt in growth of the number of first time self-assessors who need to file this year.
Chas Roy-Chowdhury, ACCA head of taxation, said: "HMRC has a common-sense decision to make. Either it can stick to the deadline and penalize all those families and self-employed people who are struggling to get to grips with the self-assessment process, or it can do the right thing and give them a lifeline by extending the deadline. Self-assessment is not easy and there are fines starting at £100 for missing the deadline even if you don't owe any tax.
"The circumstances around this year's deadline are different in that there will be a high number of people who will never have done self-assessment in their lives. They are going to miss the deadline not because they have been putting it off, but because they are newcomers. If reports are to be believed that 2 million have yet to meet the deadline just two days before it closes, then it is likely a lot of people will miss it."
ACCA, a leading body for professional accountants with 162,000 members, has urged the HMRC to push the deadline to Monday, 3rd February.
Close to 1.1 million higher-income families will be filing a tax return for the first time this year mainly due to changes in the child benefit system and welfare rules. Any parent that earns a taxable income between £50,000 and £60,000 can choose to receive child benefits on the condition that they complete a self-assessment tax return form and repay a proportion of the benefit they receive at the end of the tax year. An estimated 10% (110,000) claimants haven’t filed their return yet and are all set to be fined at least £100 in fines.
Roy-Chowdhury added: "It's not an easy form to complete and often mistakes will happen because people filling them in don't know for sure what should be included. For example, interest gained on mis-sold payment protection insurance compensation needs to be declared, but it is not obvious. Get it wrong and you could be fined."
"We urge HMRC to do the right thing and postpone the deadline."
The deadline for submitting an online tax return is 31 January, with 10.9 million people expected to file this year. According to latest figures published by the HMRC, around 1.5 million people are yet to file with close to 290,000 people filing on 28th January and another 300,000 yesterday on the 29th.
Late returns, even by a day, incur an initial £100 fixed penalty. After this point, the fine goes to £10 a day for 3 months (up to a maximum of £900), then a fixed penalty of £300 (or 5% of the overdue tax) in addition to the earlier charges. This applies even if you don’t owe any tax.
Our accounting services for individuals can simplify the process; make sure you don't miss deadlines and have your tax affairs in place.