7 day grace period to be abolished

The Taxman is ending the seven-day ‘grace’ period for filing company tax returns and employers end of year PAYE returns.

From 31 March 2011, these returns must be submitted to HMRC by the actual deadline. Under the concession, HMRC did not issue penalties for late filing of Company Tax returns or employers’ and CIS end of year returns, provided they were received by the last working day within seven days of the filing date.

This ensured that penalties would not be charged when customers had taken all reasonable steps to file the returns on time, but were prevented from doing so, for example due to postal delays.

HMRC has said that the concession has become redundant because from 1 April 2011 most returns are required to be filed online and so the ‘postal delay’ excuse is no longer valid.

Anyone filing a return late will, as now, be able to request HMRC to remove any penalty, if they believe they had a reasonable excuse for the delay in filing. HMRC says that it will consider every case on its own merits.

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