The clock is ticking for millions of taxpayers who need to file a self-assessment return for 2019/20 by 31 January.
The self-employed, those who are partners in a business, and those who receive an income from savings, investment, or a buy-to-let property, are all expected to pay by the January deadline.
As well as completing an online return, savers must pay any tax due by this date. Those that miss this deadline face a £100 penalty, plus interest on the outstanding tax bill. The tax relates to earnings from 6 April 2019 to 5 April 2020.
Those in the self-assessment system usually make a forward payment on account by 31 July each year. However, HMRC allowed people to delay July’s payment this year because of the COVID-19 crisis. If no Time to Pay arrangement is in place, provided this is paid by 31 January 2021 there is no interest or surcharge to pay. While the longer deadline may have helped people manage their finances over the summer, it is likely to mean a bigger bill this January.
If your earnings have been affected by Covid and you are worried about paying you should contact HMRC at the earliest opportunity to discuss options. To file online you need to register with the gov.co.uk website, who will send a secure PIN. This takes up to a week to arrive so don’t leave it to the last minute.
If you are interested in discussing the above with us, please get in touch with one of our experienced financial planners here.
The Financial Conduct Authority does not regulate tax advice, and levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. Tax laws can change.