It is essential to taxpayers and the Government that tax returns are accurate so that the right amount of tax is levied and the Chancellor can start to re-fill his coffers. However, taxpayers may not be able to get all their information ready for January 31st.
HMRC should seriously consider giving taxpayers ‘extra time’ to file their 2019/20 Self-Assessment tax returns, which are due by 31 January 2021. Thousands of employees (including HMRC) have been working from home and may not have all the information that they need.
The shutdown of businesses, and consequently the restricted access to vital financial data, has disrupted the flow of information necessary to prepare tax returns for 2019/20.
Companies House has given extra time for filing company accounts which may impact the information required to accurately complete 2019/20 tax returns, so it makes sense for HMRC to follow suit.
Extra time would help HMRC, taxpayers, as well as those who help them put their returns together and in the long-term would probably mean that the Revenue would have to spend less time chasing up inaccurate returns.
Now we have what appears to be a second set of significant restrictions, this could further exasperate the situation.
HMRC should extend the deadline to 31 March 2021, and also do the same for tax payments that would normally become due on 31 January 2021 i.e. balancing payment for 2019/20 and 1st payment on account for 2020/21.