It’s that time of year again, and while you may have missed the January 31st tax deadline, this year looks a little different thanks to the Covid-19 pandemic and a slightly confusing self-assessment deadline extension to 28 February (confusing because taxes still needed to be paid by the 31st)
While the new extension may be a welcome relief to some, those who didn't pay their taxes by the end of January will be liable for charges nonetheless.
What normally happens when you miss the deadline?
When you miss the self-assessment filing deadline, the HMRC (Her Majesty's Revenue and Customs) usually issues an automatic £100 penalty. After that, you could be charged £10 for each further day it’s late, up to a maximum of £900. If you still haven’t filed your return after three months, HMRC will apply additional penalties.
However, there are some exceptional circumstances that the HMRC considers (normally upon appeal) to be a worthwhile reason for having missed the deadline.These circumstances can include unexpected hospital stays, serious illnesses, bereavement or even serious IT problems. For this year’s deadline however, coronavirus has been added to that list, and the HMRC has instituted a blanket pause on late self-assessment penalties until 28 February.
What is happening with the 2021 deadline?
It’s important to note that your tax payment was still due by the 31st of January (with an annual interest of 2.6% applied to any outstanding balance from 1 February) and it is unlikely that the exact amount of tax due could be known without having done the assessment. If you have missed the payment deadline, filing your assessment and paying your return as soon as possible is recommended to avoid the interest fees. Alternatively, if you have filed and need to appeal a penalty, you can follow the instructions provided by the government here.
How to file
Before you can complete and submit your tax return, you'll need to have a unique taxpayer reference (UTR) and activation code from HMRC. This can take a while to receive, so if it's the first time you're completing self-assessment, make sure you register online as soon as possible.
If you’re already registered for self-assessment online, all you need is financial information for the relevant tax year, such as your annual accounts, invoices and expenses, and/or P60, plus details of investment profits, savings interest and pension contributions. It is possible to amend your return after it’s been filed, so you should file online as soon as possible with what you have, even if you are missing some information.
Get some professional help
Tax season can be a little overwhelming, and while the HMRC has offered people a chance to breathe before they have to submit their self-assessment, that doesn’t mean they shouldn’t get their affairs and taxes in order as soon as possible.
Tailor My Property’s tax return services are available to clients across Asia and The Middle East, and ensure you’ll stay up to date with your financial responsibilities when it comes to the United Kingdom. Get in touch today.