Benjamin Franklin once famously said that ‘in this world, nothing can be said to be certain except death and taxes’. And before 2021, one of the tax certainties was that self assessment returns had to be filed by 31st January. However, it was announced recently that, for the second year running, HMRC would be waiving late filing and late payment penalties for self assessment for one month, due to the added pressure faced by agents and tax payers thanks to Covid-19.
HMRC have confirmed that they will extend the deadline for the return itself until the 28th February 2022, meaning that if you file your return in February, no late filing penalties will apply. However, the deadline for the payment of the tax itself (31st January 2022) 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 2.75% per annum. However, no late payment penalties will be applied (fixed penalties as opposed to interest) provided the tax is paid in full, or a Time To Pay arrangement is set up by 1st April 2022.
Do I need to complete a self assessment return?
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.
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