More than 2,700 people filed their Self-Assessment tax return on Christmas Day last year – while they could have been enjoying yuletide festivities instead.
Christmas is a time to relax and unwind, enjoy the company of friends and family and embrace the season of goodwill, rather than doing last-minute tax returns.
Here, Andrew Diver, Head of Taxation at Beatons Group, looks at all the things you need to consider when filing your tax return before the January 31 online deadline.
The situation
The deadline for online Self-Assessment tax returns is rapidly approaching, with documents needing to be filed by January 31.
Those who need to submit their returns include sole traders who earned more than £1,000 in the last tax year, or who are a partner in a business partnership.
But many leave it to the last minute – bringing unnecessary stress and worry to the process.
What is different this year?
With the pandemic having an impact on finances across the business world, there are a few new additions to include in your tax return.
These include grants you have received and tax deductions you might claim for working from home as a result of the pandemic.
In total, more than 2.7million HMRC customers claimed at least one Self-Employment Income Support Scheme (SEISS) payment up to April 5, 2021. But other support payments also need to be declared.
What are the penalties for missing the deadline?
Penalties can weigh up to a hefty figure for those who do not submit their tax return on time, with HMRC customers who file just one day late facing a £100 fine. It is important people get in touch should they have concerns over meeting the deadline.
The figure continues to climb as time passes, with those yet to submit three months past the deadline liable to pay £10 per day up to £900. Those who do not submit within six months of the deadline also face an additional £300, or 5% of tax due.
Should you pay 12 months late, another £300 fine is added, or 5% of your tax bill. Those deemed to have committed a serious offence can face additional fines as high as 200% of their tax due.
Why it is best to submit returns in good time
- You may be entitled to a tax refund for a number of reasons.
- If there is tax to pay preparing and submitting the return enables you to not only prepare for the tax payment due, but also where necessary contact HMRC for time to pay arrangements.
- Some claims cannot be made after the tax return deadline or anniversaries so to make sure you don’t miss out on tax reliefs submit on time
- Every taxpayer is given a risk profile by HMRC. This is governed by the entries on the tax return but also their conduct in preparing returns on time and paying tax in a timely manner.
Be careful
Fraudsters also operate close to the return deadline in the hopes of preying on those in distress - be aware and contact us if you have any concerns.
Should you need help in meeting the January 31 deadline, the friendly team at Beatons will be happy to assist.
Contact the team on 01473 659777 or info@beatons.co.uk.