Well, haven’t the first two weeks of 2021 seemed like a lifetime?! Unfortunately, the start of the new year hasn’t exactly brought with it the fresh start that we were hoping for. But, whilst things around us may be changing constantly, one thing that remains the same is the self assessment deadline, which is the 31stJanuary 2021 for 19/20 returns.
So, with the deadline looming, have you completed yours?
Who needs to complete self assessment returns?
The easiest way to check if you will need to complete a return is to use the tool on the HMRC website. To summarise, you will need to complete a self assessment return for the tax year if, during that year, you:
• Were self employed.
• Received more than £2500 in untaxed income (e.g. property rental). If less than £2,500, you should contact HMRC directly to discuss, or made any profit from selling shares, a second home/other assets and need to pay Capital Gains Tax.
• Had income from savings/investments/dividends was £10,000 or more (before tax).
• Had income (or your partner’s) was over £50,000 and one of you claimed Child Benefit.
• Had foreign income, or lived abroad but received UK income.
• Had taxable income over £100k.
• You have received correspondence from HMRC saying you owe tax from a previous tax year (that has not been paid via tax code or specific payment) or stating that you need to complete a return.
Usually, you won’t need to complete a return if your own income is from wages/pension. If any of the above applies to you though, you will need to complete and submit a return for that tax year.
When does it need to be completed by?
If you are completing your return on paper, it needs to be received by HMRC by 31st October of the year in which the tax year in question ends. If you are completing your return online, it needs to be fi led by 31stJanuary of the year after the end of the tax year in question.
So, for example, for the 19/20 tax year, a paper return needs to be fi led by 31st October 2020, and an online return by 31st January 2021.
The 31st January is also the date that any tax owed for the year is due. You may also be required to make a first payment on account in respect of the next tax year (see our previous blog for more details on payments on account).
What if I am late submitting my return?
If you are anything up to 3 months late submitting your return, you will receive a £100 penalty. This increases the more overdue the return becomes, and will also increase if tax was owed and not paid on time. You will also have to pay interest if you are late paying any tax due, so don’t put it off any longer, get that return fi led asap!
*Special note for 19/20 returns*
This year, HMRC have confirmed that they will extend the deadline for the return itself until the 28th February 2021, meaning that if you fi le your return in February, no late filing penalties will apply. However, the deadline for the payment of the tax itself (31st January 2021) has not changed so, if you don’t file your return or make payment until February, HMRC will charge late payment interest on the tax due. This is currently at a rate of 2.6% per annum.
PaperRocket Accounting provide accounting and tax services to professional contractors, freelancers, and small businesses working in the UK.
We offer our clients a flexible choice of fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.
We pride ourselves on our client satisfaction and customer service and were awarded ‘Best Contractor Accountancy’ firm 2020 in The Contracting Awards and ‘Welwyn Hatfield Business of the Year 2019’ in the SME Hertfordshire awards.
To find out how we can help you please get in touch now.
