Wales-based accountancy firm, Bevan Buckland LLP, is urging self-employed people to stay on track to file their self-assessment tax return before 31 January 2022, even though HMRC has scrapped penalties for those who file late.
There is still an added consideration for those who have received Covid-19 grants too – to make sure these are declared accurately.
Lee Bradley, Tax Director at Bevan Buckland LLP, said:
“The HMRC announcement that there will be no automatic penalties for those who miss the self-assessment deadline of 31 January will be welcomed by many. However, those who need to file a self-assessment return should still strive to do so within that deadline, since HMRC will charge interest at 2.75% from 1 February on any tax due. Also, a return that is submitted after 31 January will be treated as filed late – giving HMRC an extension to the usual 12-month enquiry period. If you can file and pay by 31 January, it is best to do so.
“According to the GOV.UK website 2,828 self-assessments were filed on Christmas Day in 2021 and around 410,000 people in Wales are required to complete a self-assessment tax return each year, with many leaving it until the last minute and many filing late. This year has been another year of upheaval for the self-employed and for small businesses and the tax deadline may have fallen to the bottom of the to-do list, but it is important that this is picked up as soon as possible. Many businesses and freelancers have seen the pandemic hit their earnings since the new tax year started in April 2021 so they may be able to reduce their first payment on account this month to ease their personal cash flow.
“If this is the case, dealing with the tax return as soon as possible is critical to making sure you don’t pay more tax than you need to. Remember, for this return you may have to include Covid-19 relief grants including the Self-Employed Income Support Schemes (SEISS) in 2020 and 2021, test and trace or self-isolation payments in England, Scotland and Wales, the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out, Coronavirus Statutory Sick Pay Rebate and Coronavirus Business Support Grants.”
Some people may also need to submit a return for rental income, other untaxed income, income from savings and investments including dividends from shares, or if they are a company director or have claimed child benefit. With just a few weeks until the self-assessment deadline for those filing online, several million self-employed people in the UK haven’t yet filed their return.
“If this is your first time completing a self-assessment tax return, or if you didn’t file one in the previous year, you should have registered to do so by 5 October 2021. If you missed this deadline you must speak to a tax expert or your accountant who can help to make sure your tax return is accurate so it is less likely to be queried.”