Deadline looms large
THE January 31 self-assessment tax deadline looks set in stone this year, despite calls by accountants to delay it due to the pandemic. So you need to crack on if you have to complete a return.
You have just two weeks to avoid the automatic £100 penalty for failing to submit your 2019/20 return. However HM Revenue & Customs (HMRC) is offering some leeway for people who are struggling to pay the tax they owe.
This year, some 12.1 million must complete a return, typically the self-employed, company directors and those with varied sources of income on top of PAYE or a pension.
More than six million have failed to file a return so far but tax specialistvictoria Todd, team head at the Low Income Tax Reform Group, said there is no time to lose, especially if you have not registered for online filing before.
“HMRC has said it may accept pandemic-related disruption as grounds to appeal the £100 penalty if that is the reason for the late filing,” she said.
However the definition of an acceptable delay is vague, so you should still complete your return if you can.
The deadline for making the first tax payment on account for the 2020/21 tax year also remains as January 31 and this includes payments originally due last July
but deferred due to Covid-19.again, HMRC is offering some leeway.
“Taxpayers unable to settle can set up a Time to Pay Arrangement and make monthly direct debits but must first submit their return,” Todd said.
If you cannot pay your tax bill within 12 months get in touch with HMRC as soon as possible, she added.
Around 25,000 have already set up Time to Pay plans and Hargreaves Lansdown personal finance analyst Sarah Coles, said: “As last-minute tax returns flood in, HMRC is likely to be inundated with requests to spread the cost.”
To qualify, you must have no outstanding tax returns, other tax debts or existing HMRC payment plans and your debt needs to be between £32 and a maximum £30,000. If you still have not
submitted your return 60 days after the debt is due, it will be too late.
Jamie Morrison, head of private client at accountancy firm HW Fisher, warned that you will still face the 5 per cent automatic late payment penalty if you fail to make an arrangement by March 2, the trigger date for that penalty. Interest is then charged at 2.6 per cent on late-paid tax.
Morrison said: “If you owe more than £30,000 or need longer than 12 months, contact HMRC.”
If you have not submitted a return before do not panic, you probably do not need to do so now, unless your income sources have changed or HMRC has made a specific request.those who do have another reason to crack on: January 31 is a Sunday and HMRC helplines are closed at the weekend.