HMRC provide advice on self-employed tax returns
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Earlier this week, the tax body announced that it will be waiving late filing and late payment penalties for Self Assessment taxpayers for one month. This will give Britons additional time to finish and complete their 2020/21 tax return, as well as pay off any remaining tax which is due. Normally, financial penalties are given to those who fail to meet essential tax deadlines on time.
However, HMRC has opted to waive these penalties in order to support those who may be struggling to complete their Self Assessment tax returns.
While the deadline to file and pay any tax for Self Assessment taxpayers remains January 31, those who cannot meet this data will be not awarded with a late filing penalty.
However, they will have to file any remaining tax returns by February 28 in order to avoid being charged at all.
Furthermore, those who are unable to pay their Self Assessment tax by the end of the month will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by the beginning of April 2022.
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HMRC did note that interest will still be payable from February 1 and recommended all Self Assessment taxpayers to complete tax returns as soon as possible.
As part of their Self Assessment tax form, taxpayers will need to publicly declare any grants or payments from pandemic-era financial support schemes.
This includes: the Self-Employment Income Support Scheme (SEISS), Coronavirus Job Retention Scheme (CJRS), self-isolation payments, local authority grants and support given via the Eat Out to Help Out scheme.
However, the £500 single payment for working households who were given tax credits does not need to be reported, according to HMRC.
Lucy Frazer, the Financial Secretary to the Treasury, outlined why the latest Covid variant is responsible for the deadline being pushed back.
Ms Frazer said: “We recognise that Omicron is putting people under pressure, so we are giving millions of people more breathing space to manage their tax affairs.
“Waiving late filing and payment penalties will help ease financial burdens and protect livelihoods as we navigate the months ahead.”
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, emphasised the importance of the extra time which is being given to taxpayers.
“We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19.
“Our decision to waive penalties for one month for Self Assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.”
Outside of HMRC, Katharine Arthur, Head of Private Client at haysmacintyre, praised the move as a welcome one for those anxious about paying their taxes in time.
Ms Arthur explained: “HMRC’s decision to waive late filing and payment penalties for Self Assessment taxpayers will come as a welcome relief for many individuals and trustees.
“With so many having been unwell with Covid over recent weeks during the spread of the Omicron variant, this step will help to ease any pressure and provide a little more leeway for those facing difficulties in filing their tax return.
“However, it is particularly important that those who can file their returns and pay any tax due still do so by the January 31 deadline.
“Those who do not pay by this date will still be required to pay interest on any late paid tax – which could be costly for many.”
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