A record 1.8m people — almost double last year’s total — missed the deadline to submit their UK personal tax return, figures released by HM Revenue & Customs on Monday revealed.
The tax authority attributed the jump in the number of people missing the January 31 deadline for self-assessment returns to the impact of the coronavirus pandemic. It confirmed the figure was the highest in the system’s 24-year history.
The pressure to meet the deadline was eased though because last week HMRC waived the automatic £100 penalty on late returns for a month after lobbying from tax professionals. However, the 2.6 per cent annual interest on late payments still began to be imposed on Monday.
HMRC did not release figures on how many people had paid an estimated amount without filing a return, as officials had advised in order to avoid interest charges.
Karl Khan, HMRC’s interim director-general for customer services, said officials “know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic”.
“Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments,” he said.
The 1.79m non-filers compared to 958,300 last year and accounted for about 15 per cent of the 12.14m returns due. Of the 10.7m returns filed, some 400,000 were voluntary submissions.
The decision to waive the £100 penalty came after pressure from accountants and tax advisers who had warned of the difficulties individuals and professionals were facing to meet this year’s deadline. Remote working, home-schooling and increased mental and physical pressures were all making completing tax returns harder, professional bodies said.
Anita Monteith, tax lead and senior policy adviser at the Institute of Chartered Accountants of England and Wales, described, the 1.8m late submissions as a “very big number”. But she said she was not surprised given the pressures professional firms and individuals were under because of the pandemic.
Glenn Collins, head of policy at the Association of Chartered Certified Accountants, said: “The fact that almost double the number of people missed the January 31 deadline shows that HMRC was right to waive penalty charges until the end of February.”
Richard Wild, head of the tax technical team at the Chartered Institute of Taxation, also welcomed HMRC’s relaxing of late-filing penalties. But, he added, it had come “a bit too late” for everybody who had been trying to meet the deadline.
But many individuals were “still confused about when they should be paying any taxes owed”, added Kevin Sefton from untied, the personal tax app. He urged late filers to submit their return as soon as possible.
HMRC urged people who had not paid their tax to pay, or arrange a payment plan, before March 3 to avoid a 5 per cent late payment penalty.