HMRC has indicated that sole traders will not be subject to the usual penalties for filing a tax return after the deadline, if they are able to demonstrate that the reason for being late is connected to COVID-19.

Close to 12 million sole traders are required to submit their tax returns ahead of the deadline on January 31st, but around 5.5 million of them have still not done so – despite the deadline looming. Now, HMRC has announced that those who are struggling to get their returns completed due to the pandemic will have the option of filling out a straightforward form explaining this, which will exempt them from being hit with a fine.

A recent Sunday Times article on this extension reported sources connected with HMRC stating that the tax authority intends to take a far less punitive line than normal towards those who are late with their returns this year – in recognition of the strain that COVID-19 has put many sole traders under. Using an accountant with experience of providing tax return services in Goole or wherever they live is something else that they can do to ease this strain.

The news is certainly likely to be welcome for people in that position, with many sole traders having suffered income drops of up to 30% throughout 2020. This decision by HMRC means that they will potentially not have to use what savings they have left to pay their tax bills, but may instead be able to use this money to keep their companies going.