HMRC blames no-deal Brexit preparation for penalty letter delays

The UK’s tax authority, HM Revenue & Customs, has said a delay in sending out penalty notices for the late filing of self-assessment returns is due to preparations for a no-deal Brexit.

HMRC revealed on Friday in a technical publication that it would send out £100 penalty notices as late as 24 hours before higher penalties would apply on April 30, leaving hundreds of thousands of people at risk of higher fines.

Normally penalty notices are sent out during February to taxpayers who have failed to submit their online tax return by the January 31 deadline.

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“[Issuing notices] creates considerable demand into our call centres and back offices, as customers contact us to consider their options,” HMRC said in its publication.

“This year, we expect an increased demand in our call centres as the UK leaves the EU, so we intend to delay the issue of these notices to ensure we can provide the best service to our customers. This will release those staff for EU Exit related work.”

Currently the UK will leave the European Union on March 29 and a deal between the two is no closer to being agreed.

The 700,000 people who missed the tax return deadline and now face a £100 penalty could now face higher penalties.

“No one will be unfairly penalised as a result of this change,” an HMRC spokesperson said. “The vast majority will be aware they missed the January 31 filing date as we do remind regularly with nudge messages before the deadline. The latest date letters will go out is April and this will still leave customers several weeks to contact us.

“This is sensible planning to make sure we focus our resources on delivering important functions in the event of a No Deal. This is about making sure we deliver key services in all circumstances.”