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The Self Assessment deadline is coming around quickly. Self-employed candidates have until January 31 to file all of their details for the previous year. 

More than 12.2 million customers are expected to complete a tax return for the 2020 to 2021 tax year. 

HMRC is calling out to the millions of people who are in this position to file their tax returns as soon as possible. They must pay outstanding liabilities or set up a payment plan if they are in a position when they owe money, ahead of 1 February, or interest will be added on if it is completed after the deadline. 

This year, however, HMRC has noted that they would waive penalties for one month if somebody is late in filing their tax returns or making payments. These changes would:

  • Remove the late filing penalty for somebody who cannot file their tax returns by the January 31 deadline – so long as they can meet the extended deadline of 28 February
  • Remove the late payment penalty for people who have not paid tax liabilities by 31 January – provided that they have sorted out the situation for 1 April

HMRC’s Director General for Customer Services, Myrtle Lloyd, said: “We know some customers may struggle to meet the Self Assessment deadline on 31 January which is why we have waived penalties for one month, giving them extra time to meet their obligations.

“And if anyone is worried about paying their tax bill, they can set up a monthly payment plan online – search ‘pay my Self Assessment’ on GOV.UK.”

If you are struggling to complete your tax return, HMRC is offering help. Check out the GOV UK website if you want assistance on booking a place to access live webinars. You will be able to access these webinars throughout the month of January. You can also check out recordings on the government website and YouTube has also provided some Self Assessment guidance if you are still unsure about where to go. 

There are no differences to HRMC’s Self Assessment helpline openings; telephone services will not be available at the weekend but they will be open as normal – until 6pm – on Monday 31 January. 

The current Time to Pay service allows any individual or business to spread their tax payments over time, if that extension is required. Self Assessment taxpayers – carrying up to £30,000 of tax debt – can do this online once they have completed their tax return. 

Self Assessment returns will affect everybody who is self-employed

Self Assessment returns will affect everybody who is self-employed

If customers were to owe over £30,000, or they needed longer to make those initial repayments, they should call the Self Assessment Payment Helpline service on 0300 200 3822. 

The GOV.UK website has a full listing of ways that people can pay their Self Assessment tax bill. 

Tax returns from 2020 to 2021 cover earnings and payments that were made during the pandemic. It is important for Tax Payers to declare if they have received any grants or payments from Coronavirus support schemes up to 5 April 2021. These support schemes include:

  • Self-Employment Income Support
  • Coronavirus Job Retention 
  • All other grants made as a result of COVID-19, including self-isolation payments, grants from local authorities, and those businesses who benefitted from the Eat Out to Help Out scheme

A £500 one-off payment for working households receiving tax credits should not be reported in a Self Assessment.

Customers should check and make any changes to their tax returns to ensure that any SEISS or COVID-19 support payments have been reported properly within their Self Assessment. 

Everyone ought to be alert if they are contacted by somebody asking for money or personal information. Taxpayers should know to type in the full online address to get the correct link for their Self Assessment return – secure and free of charge. There are a high number of fraudsters who like to email, call or text people. Do not reply to anything suspicious and look to contact HMRC directly using the contact details on GOV.UK. 

Self Assessment Extra Information

In normal circumstances, people who send their returns after the 31 January deadline. These penalties can be cancelled if the taxpayer has a fair excuse for missing the deadline, however, this year will be different. Lile last year, HMRC will not be charging late filing penalties for another month – helping out those who have been struggling with their payments as a result of the pandemic. The extended deadline runs until 28 February. 

The 31 January marks the payment deadline for Self Assessment and interest will be charged on all outstanding amounts from 1 February. In ordinary circumstances, a 5% late payment penalty is charged on outstanding unpaid tax following on from 3 March. Just like the year before, HMRC is giving some leeway to taxpayers – allowing them the opportunity to set up a payment plan. There won’t be a 5% late payment penalty if those affected can find the time to set up a payment plan by midnight of April 1. They can pay their tax bill or set up a Time to Pay arrangement online at GOV.UK. 

The Self Assessment timeline is as follows:

  • 31 January – Deadline for Self Assessments (both filing and payment)
  • 1 February – Interest starts to mount on outstanding tax bills
  • 28 February – Final day to fill out any late online tax returns, if you want to avoid a penalty
  • 1 April – the final date to pay any outstanding tax or make a Time to Pay arrangement, in order tp avoid a late payment penalty 
  • 1 April – the final date to finalise a self-serve Time to Pay arrangement online

There is no change to the filing or payment deadline and other obligations are not affected. This means that:

  • Late payments will be subject to interest rates of 2.75%
  • Returns received online in February will be treated as a return that is received late, with a legitimate excuse for being late. 
  • interest will be charged on late payment. The late payment interest rate is 2.75%
  • a return received online in February will be treated as a return received late, with a valid reasonable excuse for the lateness.

This means that:

  • there will be an extended enquiry window
  • for returns filed after 28 February the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual
  • a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022. Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up
  • we will not charge late filing penalties for SA700s and SA970s received in February. These returns can only be filed on paper for SA800s and SA900s; we will not charge a late filing penalty if taxpayers file online by the end of February. The deadline for filing SA800s and SA900s on paper was 31 October. Taxpayers who file late on paper will be charged a late filing penalty in the normal way. They can appeal against this penalty if they have a reasonable excuse for filing their paper return late

Taxpayers who are expected to make Payments on Account, but know their bill will be lower than the previous year’s bill, then they can reduce their Payments on Account. You should do this on the GOV.UK website

Tax credit customers who are unable to report their finalised income for the 2020 to 2021 tax year by 31 January 2022, should try to report it as quickly as possible after that deadline. HMRC will update the income used to calculate finalised entitlement to tax credits, if the delay is related to the Coronavirus. 

Self-employed taxpayers who need to claim certain contributory benefits soon after 31 January need to ensure their annual Class 2 National Insurance Contributions (NICs) are paid on time. This is to make sure their claims are unaffected. Class 2 NICs are included in the 2020 to 2021 Balancing Payment that is due to be paid by 31 January 2022. Benefit entitlements may be affected if they:

  • couldn’t pay their Balancing Payment by 31 January 2022
  • have entered into a Time to Pay arrangement to pay off the Balancing Payment and other self-assessment tax liabilities through installments
  • affected taxpayers should contact HMRC on 0300 200 3822 for help as soon as possible

Self-employed customers who have profits below £6,475 in the 2020 to 2021 tax year and want to pay voluntary Class 2 NICs for Contributory Benefit after 31 January 2022 or paid voluntary Class 2 NICs via Self Assessment before 31 January 2022 but will not file their return until after 31 January will need to contact HMRC on 0300 200 3500 for assistance.

Individuals and organisations can protect their online accounts and devices by using the National Cyber Security Centre’s six Cyber Aware behaviours:

  • use a strong and separate password for your email
  • create strong passwords using 3 random words
  • save your passwords in your browser
  • turn on two-factor authentication (2 FA)
  • update your devices and apps
  • backup your data

*This information has been carried over from GOV.UK

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