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Self Assessment deadline – the countdown begins

It’s that time of the year when we remind everyone that the deadline for completing your online Self Assessment tax return is only 100 days away.

At GWA we take away the ‘tax return hassle’ for our clients, filing more than 3,700 returns each year by the 31 January deadline.

It is easy to think there is plenty of time left, until 31 January 2022 but we would encourage everyone to get their Self Assessment out of the way and avoid a last minute rush. Doing it sooner rather than later, will mean you can enjoy Christmas and New Year celebrations without thinking of paperwork.

You should ensure that your 2020/21 tax return covers all your earnings during the pandemic. You will need to declare any grants and payments received from the COVID-19 support schemes up to 5 April 2021 as these are taxable. These include:

  • Self-Employment Income Support Scheme (SEISS)
  • Coronavirus Job Retention Scheme (CJRS)
  • other COVID-19 grants and support such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

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

There are standard penalties if you send in your tax return late. These apply even if you do not have a tax liability.  HMRC is waiving late filing and late payment penalties for Self Assessment taxpayers for one month*.  However, HMRC urge taxpayers to file and pay on time if they are able to.

Penalties will come into play as follows:

  • anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February
  • anyone who cannot pay their Self Assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April
  • interest on tax due will be payable from 1 February, as usual, so it is still better to pay on time if possible
  • an initial £100 late filing penalty will apply if your tax return is not filed by 28 February 2022; then
  • after 3 months a fee of £10 per day for a maximum of 90 days
  • if the form is 6 months late, the higher of £300 or 5% of the tax due
  • a further £300 or 5% of the tax due (whichever is higher) if the form is 12 months late.

The existing Time to Pay service allows any individual or business who needs it, the option to spread their tax payments over time. Self-Assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.

We would recommend, where possible, you still submit your return by the 31 January deadline.  You should only use the penalty waiver if you really must and where there are reasonable grounds for you to be able to say that the return could not be submitted on time.

If you are already GWA client, we will of course manage the whole process for you. We are extremely proud of our team and the service we offer.

But seeing as you are here, we will take this opportunity to remind any clients who haven’t given us their information yet to do this as soon as possible, to ensure we can resolve any queries that may arise.

Should you have any queries in relation to your tax return please do get in touch.

*This article was updated on 6 January 2022, in response the HMRC’s press release regarding late payment penalties.

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