HMRC confirmed that the income tax self-assessment late-filing penalty waiver (no penalties for returns filed by 28 February 2022) will also apply for the reporting of overclaimed covid-19 grants.
For businesses within income tax self-assessment, HMRC has confirmed the following reporting of overclaimed Covid-19 grants in the 2020/21 tax return:
For unincorporated businesses, the back-stop date for reporting overpaid grants in their 2020/21 tax return was 31 January 2022. However, in accordance with the recent announcement regarding the self-assessment deadline and the imposition of penalties, HMRC have confirmed to us that if the return is filed by 28 February 2022, and the overclaim is reported on that return, no penalties will be levied. This is on the proviso that the failure to report the overpayments earlier is not deliberate.
HMRC previously announced that self-assessment tax returns for 2020/21 will need to be filed by 28 February, with the tax paid by 1 April (or time to pay arrangement entered into by that date) in order to avoid late-filing and late-payment penalties (interest will continue to run from 1 February as usual). These are penalty waivers rather than deadline extensions, meaning that the usual deadlines still apply for other purposes (for example, for subsequent late-filing penalties).
Tax Journal, 2022. Overclaimed covid grants: deadlines. [online] (1563). Available at: <https://www.taxjournal.com/issue/issue-1563> (Accessed 14 February 2022).