The pressures of COVID-19 have understandably affected many individuals’ ability to file their self-assessment tax return by the 31st January 2021 deadline. HMRC has confirmed that approximately 1.8 million people have missed the filing deadline. Don’t worry, if you missed the deadline HMRC has issued necessary guidance about the next steps to take to file your tax return.
Did you miss the filing deadline?
HMRC announced that over 10.7 million people submitted their 2019/20 tax return by the 31st January 2021 deadline, leaving a further 1.8 million taxpayers who are yet to file. In normal circumstances, HMRC would issue an automatic £100 late filing penalty. However, HMRC has announced that due to the coronavirus pandemic, fines for taxpayers that file their self-assessment tax returns late will be waived until the 28th February 2021. It is important to note that interest will be applied to any outstanding balance from the 1st February 2021 so you should try and pay your tax bill as soon as possible.
Karl Khan, HMRC’s Interim Director General for Customer Services, said:
“Thank you to the 10.7 million customers who have sent in their tax returns.
We won’t send anyone a late filing penalty if they complete their tax return online by 28th February.
We know that many individuals and small businesses find it harder to pay this year, due to the pandemic. Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.”
Set up a Time to Pay plan
If you cannot pay your tax bill in one go, you can set up a Time to Pay plan that allows you to spread the payment over 12 months in instalments. The Time to Pay plan is available for anyone with debts up to £30,000, and the payment plan needs to be set up no later than 60 days after the due date of the debt. You should set up your plan sooner rather than later as a 5% late payment penalty will be charged if the tax remains outstanding, and a payment plan has not been set up, before the 3rd March 2021.
If your self-assessment debts amount to more than £30,000, or you require longer than 12 months to pay the debt in full, you may still be able to set up a Time to Pay plan, but you cannot do this online. Please call the self-assessment hotline on 0300 200 3822 as soon as possible to speak to someone about your options.
Reduce your payment on account
If you are required to make a payment on account and know your 2020/21 tax bill is going to be lower than in 2019/20 (for example – due to loss of earnings as a result of the coronavirus pandemic), you can reduce your payment on account online or via post. You can access more information about payments on account and how to reduce them on the government’s website.
Beware of scams
The governments’ announcement of temporarily waiving the late filing penalty provides much-needed breathing space for customers struggling to get all their documents together due to COVID-19. However, it also provides a much longer than usual window for scammers to target and trick taxpayers into handing over their personal information or their money. HMRC warned earlier this month that taxpayers need to be vigilant and be on the lookout for copycat HMRC websites and phishing scams.
HMRC advises customers to search ‘self-assessment’ on the gov.uk website to get a secure link to submit their self-assessment tax return. You must also be wary of any emails, calls or texts from someone claiming to be from HMRC. The scammer will often claim you are due a tax refund or owe tax or offer to get you financial help. You can access information about recognising whether a communication is genuinely from HMRC or not on the government’s website. The useful guide contains a list of phone calls, letters, emails and text messages recently issued by HRMC and genuine contact information to help you determine whether a fraudster is trying to get your personal information.
Do you still need to file your Self-Assessment Tax Return?
If you still need to file your self-assessment tax return, why not enlist the help of our expert Personal Tax team? We’ll take care of everything for you, including calculating if you’re due a tax refund or have a liability, completing all the relevant forms, and submitting the information to HMRC. We can save you hours of stress and confusion and will ensure you avoid a late filing penalty which you will incur from the 28th February 2021.
Founded by an IT Contractor in 1998, Churchill Knight has become one of the most respected contractor accountants in the UK. We’ve helped over 20,000 contractors with their accountancy requirements. As well as our accountancy services, we also have an industry-leading PAYE umbrella company and dedicated in-house personal tax department. Whichever service you choose, you can move forward with complete peace of mind. We are proud of the reputation we’ve built over the years, and our FCSA accreditation proves how committed we are to compliance within our sector. Keep reading…