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Self assessment tax return : Fines of £5k to be levied as millions rush – deadline warning | Personal Finance | Finance


Self assessment tax returns must be completed and paid up by January 31 and covering this obligation has never been more important given the impact of coronavirus. HMRC has altered tax return rules to accommodate pandemic difficulties but they have not changed the deadline, despite some hoping it would be extended.

On this, the Low Incomes Tax Reform Group (LITRG) is urging affected workers to complete their returns by the deadline to ensure no penalties are issued to already struggling families.

In analysing HMRC’s data, LITRG highlighted that 6.6 million tax returns had been completed by January 4 out of a total 12.1 million, leaving just under half due within the next few days.

Victoria Todd, the Head of LITRG, commented on this: “Despite the continuing disruption to our daily lives caused by the coronavirus pandemic, it is vital that people understand the January 31 Self Assessment deadline remains and act without delay.

“There is still time to avoid a penalty if you are one of the millions of people yet to complete and submit a tax return online for 2019/20.

READ MORE: SEISS: Guidance issued on how the self-employed can prepare for 2021

“If you do not qualify for this or need longer to pay, you should get in touch with HMRC as soon as possible.”

Similar sentiment was shared by Dawn Register, the Head of Tax Dispute at BDO, who issued an additional warning on scams: “For many businesses 2020 is a tale of two halves and this will impact their tax return filings. In particular, cash flow management is a top priority for individuals and businesses.

“HMRC expects over 12 million people to file personal tax returns by 31st of January 2021. These 2019-20 tax returns are to report income generated from 6 April 2019 to 5 April 2020, a period largely pre-pandemic, and in buoyant trading conditions for many.

“Of course 10 months on, many of the same businesses are now facing a dramatically different financial position. Time is of the essence to file those tax returns as soon as possible in January. As HMRC highlights, the sooner people file their tax returns, the sooner and easier it should be to agree payment arrangements and minimise penalties.

“HMRC has recently warned taxpayers to be aware of copycat HMRC websites and phishing scams. There are numerous examples of people being targeted by bogus text messages, emails and phone calls. This is an increased risk now everybody is at home in lockdown.

“It is vitally important for taxpayers to not take any rash action when approached by HMRC or someone claiming to be HMRC. If in doubt, take a look at guidance on gov.uk and consider running it past your adviser or an HMRC representative via the official helpline.

“A key tip for this year is to check if you can reduce your 2020-21 payments on account. Due to the impact of the Covid-19 restrictions on business income since March 2020, it is expected that many individual’s Trading Income figures in 2020-21 will be lower compared to 2019-20.

“In these cases, it may be that reducing payments on account to HMRC can help current cash flow. This can be done online through the Gov.uk personal tax account or by post using Form SA303.”

This advice may impact more people than expected this year as coronavirus could add to existing dread over handling admin and paperwork.

In analysing data from a survey of 501 self-employed adults and ONS figures, EY TaxChat, found that 20 percent of people put off their tax returns as they “can’t face” digging out the necessary documents, 23 percent delay it due simply hating admin and 22 percent leave it to the last minute simply because they find it boring.

This lack of motivation has cost people a lot of money in the past, with 13 percent of respondents who incurred fines in previous years detailing they paid somewhere between £501 and £5,000 due to a prolonged delay or having additional interest added.

Mark Lee, a UK EY TaxChat Leader, concluded with a final warning: “Filing a tax return is a once-a-year event that can creep up on many, including the self-employed, and often results in a rush in January to get everything done before the deadline. Large numbers don’t quite get there and end up submitting theirs late, which can be a costly – and needless – mistake.”



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