Mirroring last year’s move, self-employed hairdressers will now have an additional 28 days to submit their 2020/21 tax return and pay any tax due, without being penalised by the government department.
HMRC has said that late filing and late payment penalties will be waived for a month for self-employed taxpayers, as it recognises ‘the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19.’
Under the changes, people will have until 28 February to file their returns and pay any tax due or set up a Time to Pay Arrangement by 1 April. The existing Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self-assessment taxpayers with up to £30,000 of tax debt can do this online once they have filed their return.
According to HMRC, 6.5 million people have already filed this year’s tax return, leaving 5.7 million yet to do so. Despite the penalty waiver, which may seem good news for the millions of people who have still not filed their 2020-21 tax return, it’s important to note that interest will be payable from 1 February 2022. As such, people who are able to should get ahead of the 31 January deadline and use the weeks ahead wisely to get their affairs in order, ensuring they get it right and, if needed, arranging a payment plan across 12 months.
Every year millions of people leave filing their tax return until a week before the deadline. There’s no doubt that people have been impacted by COVID-19 and this year’s return will be different for millions as they will have to ensure they account for any SEISS grants they received in this self-assessment, so people should allow themselves more time. What’s more, unfortunately COVID may continue to impact people into February so people who are well and able to, should aim to complete their return in January.
It’s also been announced that HMRC has paused its webchat service from this week for three months so anyone with questions would do well to get ahead of the deadline. If in doubt, you can make your life easier with online tools, as you’ll be prompted and advised when you input your earnings, ensuring you pay exactly what you owe and receive the benefit of any tax reliefs you may be entitled to.
Mike Parkes is Technical Director at GoSimpleTax – the online tax return and self-assessment software.
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