Self-assessment filing deadline pushed back by one month – but tax is still due on January 31 – Forbes Advisor UK

According to HM Revenue & Customs, more than 2,700 Britons spent Christmas Day 2020 submitting their tax returns online.

In total, 31,400 people completed their 2019/2020 tax return between December 24 and 26.

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UPDATE JANUARY 25, 2021

The HMRC has announced that individuals required to file self-assessment tax returns who cannot file by the January 31, 2021 deadline will not receive a late filing penalty if they file online by February 28.

It is estimated that three million people who are required to file a self-assessment report have not yet done so. Almost nine million have already deposited.

Importantly, the extension of the deadline includes the payment of the tax due. Taxpayers are still required to pay their bill before January 31, and interest will be charged from February 1 on unpaid debts.

Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over a period of up to 12 months. But they will need to file their 2019-20 tax return before they set up a payment deadline, so HMRC encourages everyone to do so as soon as possible.

HMRC said, “Not charging late filing penalties for late online tax returns submitted in February will give people the breathing space they need to complete and file their returns, without worrying about receiving a penalty. We can reasonably assume that most of these people will have a valid reason for filing a delay, caused by the pandemic. “

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Setting up a tax bill early can help you with your financial plans for the coming year, and following the rules means not facing a £ 100 fine.

As time is running out until an important January deadline, here’s our guide to income tax returns and self-assessment.

Who has to file an income tax return?

Most UK taxpayers have their taxes deducted automatically through payroll, wages or pensions and are not required to complete any additional documents.

But if you were self-employed for all (or part) of the 2019-2020 tax year (ranging from April 6, 2019 to April 5, 2020), you are likely to have to complete a self-assessment tax return. (or pay an agent, such as an accountant, to do it on your behalf).

The same is true if, during this period, you have received more than £ 10,000 in savings and investment income.

Other candidates for the self-assessment typically include business partners, as well as landlords who receive rental property income. Belonging to one of these categories means that the onus is on the individual to declare their taxable income. This is not to wait to hear from HMRC before submitting a statement.

The GOV.uk website has a tool to help you know if you should send a return and also provides advice on how to Register now for self-assessment. If you are a higher rate taxpayer, it may be as well to check your position.

The deadline is looming: January 31

Once registered for the self-assessment, if you have to complete a declaration for the 2019-2020 tax year, the key date to remember is January 31, 2021.

If you miss this deadline, the HMRC normally imposes an immediate fine of £ 100 which increases according to the time it takes for the taxpayer to eventually submit their tax return.

As explained above, the deadline to complete a return has been extended to February 28 for returns filed online (but the tax is still due before January 31).

Rather than missing the deadline (for example, due to missing information), it’s best to submit an estimated return and update the numbers once you have the correct ones on hand.

How to complete an income tax return?

Paper returns, once the norm, are much less common these days, except in more complicated cases (such as those involving trustees). Paper returns related to the 2019-2020 tax year should already have been submitted to HMRC by October 31, 2020.

According to HMRC, of ​​the 11.1 million taxpayers who filed before January 31 this year, 10 million completed the transaction online.

How to get started online?

You can start the process by visiting the GOV.uk website.

If you’ve never filed a tax return online before, it’s important to allow yourself plenty of time to register for the system before the January 31 deadline. HMRC suggests reserving approximately 20 additional days for this process to complete.

So if the prospect of paying your taxes over the holiday season doesn’t appeal to you, prepare to crack as early as possible in the New Year.

This is because part of the registration process involves receiving a ten-digit code. Unique taxpayer reference from HMRC by mail. The correspondence will also include instructions on how to set up what is known as your Government Gateway account.

Once this option is activated, an activation code is sent separately. It is also required to complete your account setup. Once activated, the process of logging in and submitting your tax return can finally begin.

How to complete a tax return?

The GOV.uk website has a lot of tips, including fact sheets and webinars.

You only have to complete the parts of the form that correspond to your situation and, if you are a self-employed person, you may be authorized to account for your professional expenses using the “Simplified expenses” method.

No matter how simple or complex you might be, before you start filling out the form, it’s worth gathering all the information you are likely to need. This includes: your national insurance number; accounts; invoices; Received; and other records of income from banks or other financial organizations.

You will also need expense statements and any forms with relevant tax information, such as a P45 or P60. To pay any taxes owed or receive refunds, you will need to provide bank or mortgage company details.

Having all of your numbers close at hand prevents the likelihood of missing key information, like a one-time payment that you might have forgotten. It is important to be as specific as possible in the details you provide, remembering to differentiate between “net” or “gross” numbers.

Once you’ve completed your tax return, you can see a calculation of your tax bill.

It is not essential to pay your tax bill at the same time as you file your tax return, but to comply with the rules, you will have to pay the unpaid amount by the end of January.

I can’t afford to pay?

If you cannot pay your self-assessment bill, it is important to contact HMRC as soon as possible. If you owe less than £ 30,000, have no other debt with HMRC, and your tax returns are up to date, you may be allowed to set up a payment plan to spread the cost of your bill.

“The bottom line is to file your tax return before the January 31 deadline, even if you don’t think you can pay all the taxes at once. Once the return is filed, you can request an agreement on the payment deadline, ”advises Jeremy Coker, president of the Association of Taxation Technicians.

To be eligible for the payment deadline, HMRC states that individuals must apply within 60 days of the normal payment deadline. This translates to April 1, 2021.

Other useful contact details

It is possible to have a online chat with an online advisor and ask general questions via Twitter using @HMRCcustomers.

The phone number for HMRC’s general advice line is 0300 200 3310, although it’s worth noting that it gets particularly busy as the January 31 deadline approaches.

HMRC’s Self-Assessment Payment Hotline is 0300 200 3822. It is also very likely to be busy throughout January, unless millions of people decide to. tackling their return following the Queen’s Christmas Day Speech this year.

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