HMRC announces one month late filing reprieve
The standard deadline for individuals filing a tax return is 31 January. Failure to meet this deadline usually means a £100 automatic penalty applies, even if no tax is owed. Why will an HMRC announcement bring relief to those struggling due to the pandemic?
HMRC has acknowledged the ongoing pressure on taxpayers arising from the coronavirus pandemic and the knock-on effect it is having on self-assessment filing. It is estimated that over 5 million tax returns are due to be filed this month ahead of the 31 January deadline. To ease the pressure, HMRC has announced that no automatic penalty for a late return will be issued as long as the filing is made by 28 February. Additionally, no late payment penalty will apply if payment is made in full by 1 April (or the taxpayer agrees a payment plan before that date).
Care is needed where the taxpayer is self-employed - especially if 2020/21 is the first year of trading. Class 2 NI is collected via self-assessment but administered by a separate department. Late payment of the modest liability can put entitlement to certain welfare payments at risk. Taxpayers should contact HMRC to make a separate payment to avoid problems.
Related Topics
-
Company buying back shares? Watch out for forthcoming changes
Company owners arranging a retirement, a family succession or a shareholder exit may need to rethink how shares are bought back. The Budget confirms that the government intends to tighten the rules distinguishing capital gains from dividend income, potentially making some buybacks considerably more expensive. How might an ordinary business exit be caught?
-
What can you learn from HMRC’s input tax toolkit?
You know that penalties can be charged on careless errors and many mistakes relate to input tax being wrongly claimed. How can HMRC’s input tax guidance help your business to claim the right amount?
-
A £3,000 side-hustle allowance: more generous than it looks?
People making money from small side businesses will have more room to earn without paying income tax, following a Budget decision to triple the trading allowance. However, the figure relates to what you receive before expenses, not the profit you keep. Will the £3,000 allowance actually save you tax?