ICAS writes to HMRC regarding coronavirus impacts on agents and tax compliance
By Charlotte Barbour, Director of Taxation
10 November 2020
ICAS CEO Bruce Cartwright has written to HMRC to request that it announces an automatic waiver of late filing penalties for any annual returns filed up to three months late, for returns due between now and 30 June 2021.
For many accountancy and tax agent firms, particularly those where there are significant numbers of income tax returns to be completed, it is always the case that the build up to 31 January is a peak period of work. This year the pressures have been compounded by the coronavirus pandemic. The following have aggravated pressures arising from an already intense work period.
- When coronavirus struck some clients stopped sending in their accounts; clients now face the ongoing pressures of refocusing their businesses, whilst subject to significant operating challenges and restrictions.
- Accountancy and tax agent firms have also had to transfer to ‘work from home’ with all the associated pressures that this brings.
- Many smaller firms are assisting their clients with the CJRS and SEISS claims; often it is the same staff in the tax agent firms who prepare the business tax returns.
- Agents’ staff are already working long hours and their senior partners are concerned that they cannot be asked to do even longer hours.
- Companies House extending the filing deadlines by 3 months has meant that clients are now working to this deadline; and questions around whether businesses remain ‘going concerns’ can also cause delays.
As a result of the coronavirus pandemic impacts described above, some firms report being significantly behind compared with prior years in the number of tax returns progressed or completed.
The option of making an individual appeal in each late filing case (on the basis of a reasonable excuse due to coronavirus) is neither feasible nor an efficient use of taxpayers, agents or HMRC’s time.
This is all happening as many businesses are implementing changes arising from Brexit and seeking assistance from agent firms around this as well.
ICAS has therefore written to HMRC – we would like HMRC to announce that penalties will be waived for up to any three-month delay in an annual tax return filing for those returns due between now and 30 June 2021.