There are now less than 68 days to file your 2020-21 Self-Assessment tax return. Last year over 12.5 million taxpayers were required to complete a Self-Assessment tax return, but over 1.8 million taxpayers missed the 31 January deadline.
That represents an awful lot of late filing penalties for the Treasury and a huge but avoidable expense for those taxpayers.
The deadline for submitting your 2020-21 Self-Assessment tax returns online is 31 January 2022. You should also be aware that payment of any tax due should also be made by this date. This includes the payment of any balance of Self-Assessment liability for the 2020-21 plus the first payment on account due for the current 2021-22 tax year.
If you miss the filing deadline, then you will usually be charged a £100 fixed penalty if your return is up to 3 months late, regardless of whether you owed tax or not.
HMRC encourages taxpayers to complete their tax returns as early as possible to avoid getting stressed as the filing date looms. In fact, last year over 2,700 taxpayers submitted their tax returns on Christmas Day, with a further 8,500 taxpayers completing their tax returns on Boxing Day.
If you are filing online for the first time, you must register to use HMRC’s self-assessment online service as soon as possible if you haven’t done so yet. When you register on the Government Gateway, an activation code will be sent in the post and can take up to 10 working days, so give yourself plenty of time for this.
Remember that most COVID support scheme grants are treated as taxable income in the same way as other taxable receipts and need to be included on your Tax Return. This means that if you received a support payment during the 2020-21 tax year, this needs to be reported on your self-assessment tax return, and there’s a new section on the return, especially for some of these. The support payments you need to declare as income include the following:
- The Self Employment Income Support Scheme (SEISS)
- Test and trace or self-isolation payments
- the Coronavirus Job Retention Scheme (CJRS)
- Eat Out to Help Out
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
However, if you received the £500 one-off payment for working households receiving tax credits, you don’t need to report this under self-assessment as it’s not taxable. Loans, such as Bounce Back Loans or those from the Coronavirus Business Interruption Loan Scheme (CBILS), are not COVID-19 support payments and don’t count as income – after all, you have to repay them eventually!
Need help completing your 2021 Tax Return? Be sure to get in touch with us as soon as possible – we’ll make every effort to help, but we’ll be especially busy in January, so we may have limited capacity to take on any new tax clients in January!