Tax return filing down on last year
Over 10.2million people managed to file their 2020/21 tax returns by the 31st January deadline. While this figure seems high, it is down 500,000 on the previous year. This leaves 2.3m taxpayers failing to file on time, according to information from HMRC.
31st January 2022 saw 630,000 self-assessment customers filing their returns. 20,947 of these completed their tax return between 23:00 and 23:59! The majority of these, however, were filed between 16:00 to 16:59. Furthermore, 95.6% of tax returns submitted were filed electronically, with only a small minority sticking to the old paper format.
What if I haven’t filed yet?
The 2.3million taxpayers who failed to file on time need not worry just yet. As we advised previously, HMRC confirmed that anyone who cannot file their return by the 31st January deadline will not receive a late filing penalty as long as they file online by 28th February. Moreover, anyone who cannot pay their self-assessment tax by the 31st January deadline will not receive a late payment penalty if they pay their tax in full, or set up a payment plan, by 1st April.
However, it is important to remember that interest on tax owed will still be payable from 1st February as usual, so it may be more beneficial to pay on time if you are able to. Any late unpaid amounts will attract daily interest at a 2.75% annualised rate, and a 5% surcharge if not paid by 2nd March.
Therefore, due to this, those who are not able to file their tax returns yet should still pay an approximate amount as soon as possible to minimise the interest which will accrue. There is an online calculator available for self-employed people to estimate what they might owe.
Also, even though tax returns filed by 28th February will not be late in terms of owing late payment penalties, the tax return will still be classed as ‘late’ in other ways. For instance, this could mean that the deadline for HMRC to raise an enquiry into the tax return is automatically extended.
What if I can’t pay my tax bill?
Myrtle Lloyd, HMRC’s Director General for Customer Services said the following:
‘I’d like to thank the millions of customers and agents who sent us their tax return and paid in time for this week’s deadline. We’re waiving penalties this year, to give those who missed the deadline an extra month. And customers can set up a monthly payment plan online if they’re worried about paying their tax bill.’
Ms Lloyd is referring to the Time to Pay service, which allows taxpayers who are struggling to pay their bills in full the option of spreading their tax payments into manageable monthly instalments. If you have an outstanding tax bill of up to £30,000, you can set this up online once you have submitted your return. However, if your tax bill is in excess of this figure, and you feel you can’t pay all at once, you must call the self-assessment payment helpline on 0300 200 3822 to discuss your options.
File and pay as soon as possible
If you are one of the 2.3million who is yet to file their self-assessment tax return, we would advise you to do this as soon as you can. Certainly, take care of any tax owed as a matter of import, providing you are able to, to ensure you are not racking up interest payments as well.
Please also remember to include any grants or payments from the Covid-19 support schemes up to 5th April 2021 on your return, as these are taxable.
Moreover, please ensure you remain vigilant to scams when going through the process of completing and filing your return, as fraudsters are known to purport as HMRC to obtain money or personal information from unsuspecting individuals.
As always, if you would like any further information regarding the above, please feel free to contact our offices by email info@williamsoncroft.co.uk.