Christmas is behind us, and the New Year is here. You don’t need us to remind you that if you’re required to file a Self Assessment tax return, you should really have done so by now.
But we’re going to remind you anyway – because if you don’t get your return for the tax year 2020-21 in on time, the consequences may be costly.
We know that life and work can get in the way of staying on top of your tax obligations, and the tax filing deadline comes at a particularly busy time of the year.
If you’ve yet to file your return, the good news is that you do still have time – but the clock is counting down, and you need to act quickly if you want to avoid incurring an instant fine.
Don’t miss the final deadline for filing & making payment!
The deadline for filing your online Self Assessment tax return for the tax year 2020-21 – AND for settling any tax you owe to HMRC is midnight on 31st January 2022.
If your tax bill is more than £1k, this is also the deadline for making the first of your two payments on account – advance contributions towards your 2021-22 tax bill. Your second payment on account will be due on 31st July 2022.
This year, 31st January is a Monday. If you’re filing in January, it’s unlikely that HMRC will have sufficient time to send out a hard copy invoice. For this reason, you should make sure you settle your online bill as soon as you know what it is. Don’t wait to receive a notice in the post: if you do, your payment will be late, attracting interest and potentially penalties too.
Did you receive a SEIS grant in the 2020-21 tax year?
Don’t forget that if you received any Self Employment Income Support grants (SEIS) during the tax year 2020-21, these are taxable and must be reported as income. If you received any grants for which you were not eligible, you must notify HMRC and make arrangements to pay them back.
Do you need to complete a tax return?
There is sometimes confusion over who needs to complete and file a Self Assessment tax return. Generally speaking, people who are required to complete a return will fall into one of three categories:
- Anyone who is self-employed and therefore does not have their tax collected through the Pay as You Earn (PAYE) system
- Anyone earning more than £100k per year, even if paid via PAYE
- Anyone who earns income that is not taxed at source.
You must complete a return if any of the following applied to you during the tax year 2020-21:
- You were self-employed as a ‘sole trader’ and earned more than £1k – before tax relief
- You were a partner in a business partnership
- You received any other untaxed income, for example, from:
- Savings, investments and dividends
- Renting out a property
- Overseas assets
From experience gained over many years, we know that two areas commonly catch people out – income generated by renting out property and income earned on overseas assets.
As we’ve reported before, HMRC is increasingly making use of information shared by financial institutions, including banks and building societies, to track undeclared income. This level of transparency means if you do have earnings that you’re not reporting, HMRC will eventually find out – and it’s far better to declare it before they contact you.
Don’t make the mistake of thinking that if you need to complete a Self Assessment return, HMRC will contact you. The responsibility is yours and yours alone. Pleading ignorance will give you no protection, and with fines for late filing and interest on overdue tax accruing quickly, the consequences can be costly.
If you’re unsure whether you need to complete a return, HMRC has a simple checker tool that can tell you within just a few mouse clicks.
Don't Leave It Any Later! Let Inca Take Care of Your Tax Return Now
Time is running out. The 31st January deadline is almost here. If you need help or advice on completing your 2020-21 tax return, get in touch with us right away, and we’ll do our utmost to help you.
Even if you’ve already managed to file your return, wouldn’t your time be better spent on your business? Let us take care of your next tax return, and you’ll have the peace of mind that comes from knowing everything will be done correctly and on time – and we may even be able to save you money by helping you be more tax-efficient!
Every year, Inca looks after the timely completion and filing of Self Assessment tax returns on behalf of hundreds of clients, including many who run their own businesses.
To find out more call us now on 01235 868888 or contact us by email at [email protected]
