We live in unusual times because of the ongoing coronavirus disruption.
When it comes to Self Assessment, HMRC has responded sympathetically to the issues many are having around filing their returns and also paying, offering the following measures:
- Late payment penalties waived: HMRC announced in mid-February 2021 that, provided Self Assessment tax bills were paid before 1 April 2021, or a Time to Pay plan was setup, filers won’t be charged the 5% late payment penalty.
- Waived fines for late filing: Although HMRC always requires Self Assessment returns to be filed by 31 January, it announced in January 2021 that it was waiving the automatic £100 penalty this year only provided the returns were filed by 28 February 2021.
Nonetheless, many accountants and other kinds of tax agents have clients for whom Self Assessment returns have yet to be filed because of ongoing coronavirus disruption.
Therefore, HMRC has announced a third measure – a new route to making appeals against penalties for Self Assessment clients.
For the six months following 24 March 2021, tax agents can submit bulk appeals against late filing penalties that were applied to clients from 1 March 2021 onwards.
This lets tax agents appeal quickly and easily on behalf of multiple clients.
There are some conditions attached, though, as we explain below. Here’s what we cover in this article:
Who can use the bulk appeal for late filing penalties?
Accountants and other kinds of tax agents can make use of the bulk appeal.
They might do this because the client themselves have been tardy providing the required information so missed the 28 February 2021 effective extension for filing.
Or it might be because the agent themselves have experienced difficulties meeting that date.
“HMRC recognise that due to the ongoing pandemic some customers and agents will still have difficulty meeting their filing obligations and have advised that COVID-19 may be accepted as a reasonable excuse for any appeals made against a late filing penalty for Self Assessment customers.”
That last part is vital.
This can’t be used as a general tool for late filing, and nor is this measure from HMRC a licence to take your foot off the pedal when it comes to tasks related to Self Assessment.
There must be a demonstrable link to coronavirus disruption.
“This service is only for a COVID-19 related reasonable excuse. HMRC reserve the right to carry out random checks to ensure the validity of the data or to seek further clarification as to the exact nature of the COVID-19 related reasonable excuse.”
While the measure was created for tax agents, if you’re a smaller business or individual using Self Assessment who has received a penalty for filing a Self Assessment return after 28 February 2021, because of coronavirus disruption, then you should be speaking to your accountant in any event – but you may want to mention the bulk filing announcement in case they don’t know.
Similarly, accountants and other tax agents should approach clients who missed the 28 February 2021 deadline to discuss the late filing appeal process.
You should explain how you can work with clients who are late to file, confirm if coronavirus had an impact and – if so – file the appeal in bulk on behalf of a range of clients.
Using this bulk appeal mechanism is very low-cost to you as an agent, and helps cement a stronger agent-client relationship.
How do I use the bulk appeal for late filing penalties?
To use the bulk appeal for late filing penalties you’ll need to download the correct template from HMRC, and then send it in by post to Bulk Agent Appeals, HM Revenue and Customs, BX9 1ZH.
The bulk appeal against late-filing penalties can’t be done online.
What do I need to know about the bulk appeal for late filing penalties?
There’s quite a few quirks to using the bulk appeal process, as follows:
- It’s only for clients who missed the 28 February 2021 effectively extended deadline and therefore incurred a late-filing penalty. It needn’t be used for clients who simply missed the 31 January deadline.
- You can only submit up to 25 clients at a time. If you have more clients than this, then multiple submissions must be made. Furthermore, you can only send one at a time to HMRC at the address listed earlier. In other words, each list of 25 or fewer clients must be sent using its own envelope and postage.
- All fields on the template must be filled in. HMRC says simply that it “won’t process the appeal” for any client whose details are not complete.
- Appeals for a High Net Worth Unit case should be submitted via the normal single-individual-appeal route, discussed earlier, and should not be included in any bulk appeal.
If HMRC makes extraordinary allowances such as this then it’s nearly always worth making use of them.
In this case, there’s a clear business advantage for accountants and tax agents because it makes a somewhat labour-intensive task into something that can be completed significantly more quickly.
Clients won’t see this behind-the-scenes magic, however, so it makes sense to offer this bulk appeal to all those that need it in order to boost feelings of goodwill.
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