Putting off completing your HMRC Self Assessment is no longer an option as the April deadline approaches

To avoid incurring the wrath of the taxman, Self Assessment taxpayers have just over a week to get their self-assessment in order to pay any outstanding tax liabilities in full. Alternatively, they can set up an online payment plan for the 2019/20 financial year to avoid incurring penalty charges, according to HM Revenue & Customs (HMRC).

Taxpayers have also been warned to be alert to copycat HMRC websites and phishing scams, or if someone calls saying you can claim financial help, are due a tax refund or owe tax.

Last month, HMRC said that due to the impact of the COVID-19 pandemic, they were giving Self Assessment taxpayers more time to pay their tax or set up a payment plan without facing a five per cent late payment penalty charge, as long as arrangements were in place by midnight on April 1.

Those who have yet to settle their liabilities for the 2019/20 financial year can pay their tax bill or set up a monthly payment plan online at GOV.UK. They can pay online, via their bank, or by post.

Alternatively, setting up a Time to Pay arrangement allows taxpayers to spread the cost of their Self Assessment tax bill into monthly instalments until January 2022.

Anyone worried about paying their tax and unable to set up a payment plan online should contact HMRC for help and support on 0300 200 3822.

Almost 117,000 taxpayers have set up a self-serve Time to Pay arrangement online, totalling more than £437 million.

There is no change to the payment deadline and other obligations are not affected. This means that:

  • The payment deadline remains 31 January 2021 and interest will be charged on late payment. The current rate of late payment interest is 2.6 per cent.
  • A five per cent late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2021.

Further late payment penalties are charged at six and 12 months (August 2021 and February 2022 respectively), on tax outstanding where a payment plan has not been set up.

Self Assessment taxpayers who are required to make Payments on Account and know their 2020/21 tax bill is going to be lower than in 2019/20 – for example due to loss of earnings because of COVID-19 – can reduce their payments. Visit GOV.UK to find out more about Payments on Account and how to reduce them.

Taxpayers should search ‘self assessment’ on GOV.UK to get the correct link for their Self Assessment tax return online securely and free of charge to avoid copycat and phishing scams. Check GOV.UK for information on how to recognise genuine HMRC contacts.

The self-employed are also reminded that they can claim on the SEISS (Self Employment Income Support Scheme).

At the Budget it was confirmed that the fourth SEISS grant will be set at 80 per cent of three months’ average trading profits, paid out in a single instalment, capped at £7,500. The grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.

Posted in Blog, Tax.