2020 was an unexpected year for everyone. It made us all reflect on how we spend our time. Some of our daily, and even annual routines changed to adapt to this new environment from more outdoor exercise to home schooling. One change may have been to set aside time to submit your Tax Return earlier than in previous years. 2,700 people chose to do this on Christmas Day with most filing before they settled down for Christmas lunch.
With so many deadline deferrals and government initiatives to help us through the pandemic, you may have been hoping HMRC would defer the 31 January filing deadline for your 2020 Tax Returns. Unfortunately, HMRC have announced the deadline is not budging.
Have you submitted your 2020 Tax Return? There are just days left, but you still have time to beat the deadline. If this is you, don't delay any longer, avoid the £100 penalty for late submission and ensure you know how much tax to pay by 31 January to avoid late payment charges.
If you deferred your July 2020 payment you will also owe this along with any outstanding tax for 2019/2020 and your first payment on account for the current tax year.
Once your return is completed and the liability calculated you need to assess if you have sufficient funds to pay the amount due. The effects of last year may mean you have insufficient cash available and HMRC have recognised this. HMRC are therefore allowing self-assessment taxpayers to pay their 31 January liability in instalments up to a maximum of 12 months.
If your total liability is less than £30,000 and your tax affairs are otherwise up to date you can do this online without the need to contact HMRC: https://www.tax.service.gov.uk/pay-what-you-owe-in-instalments Although there will be no penalties for late payment if you set up a payment plan, interest will be payable (currently 2.6% per annum). Those with a liability greater than £30,000 who cannot pay will have to contact HMRC in the normal way to agree a payment plan.
What do I need to do now?
The first step is to get your tax return submitted as soon as possible and then if necessary, organise your payment plan.
If you need any help with your Tax Return or want more information on payment plans, please do not hesitate to contact us.