Late fees for self-assessment tax payers to be waived by HMRC if they set up payment plan by April 1
SELF-employed workers who pay their tax or set up a payment plan by April 1 won’t be charged a 5% late fee.
But taxpayers are still urged to settle any outstanding amount as soon as possible, as you’re still charged interest.
🦠 Read our coronavirus live blog for the latest news & updates…
Normally, a 5% late payment penalty is charged on any unpaid tax that is still outstanding after 30 days.
After this, you get charged another 5% of what you owe at six months, and another 5% again at 12 months.
But because of the coronavirus pandemic, HMRC has agreed to waive the 5% payment penalty charged on unpaid tax that is still outstanding on 3 March, as long as you pay or set up payment plan by 11.59pm on April 1.
A 5% late payment penalty fee will still be charged after 1 April, and again at six months and 12 months.
How do I fill in the tax return?
BEFORE you can complete and submit your tax return, you’ll need to have a unique taxpayer reference (UTR) and activation code from HMRC.
This can take a while to receive, so if it's the first time you're completing self-assessment, make sure you register online as soon as possible.
To sign in or register visit the "Self Assessment tax return" section of HMRC's website.
If you've already signed up for self-assessment, you can find your UTR on relevant letters and emails from HMRC.
HMRC accepts your payment on the date you make it, not the date it reaches its account – including on weekends.
If you need to change your tax return after you've filed it, you can do so within 12 months of the original deadline or you can write to HMRC for any changes after that.
Filling in your tax return can seem daunting, but with our step-by-step guide you'll have it sorted in no time.
Those who can’t afford to pay their tax bill in one lump can choose to spread their payments across monthly installments through “Time to Pay” on the HMRC website.
But again, you should be aware that interest worth 2.6% will still accrue on any outstanding payments, even if you’ve set up a plan.
We've asked HMRC if the waiving of the 5% late payment fee applies for the entire tax year and we'll update this article when we get a response.
The deadline for completing an online self-assessment tax return was 31 January 2021.
HMRC has already scrapped the usual £100 late fee for missing this January return date.
Instead, assessment taxpayers have until February 28, 2021, to get their self-assessment tax return online without being slapped with a penalty.
Waiving the late return penalty also only applies to late tax returns submitted online.
It means those who file at the bank or by post after the deadline will still be fined – even if there is nothing to pay.
Late returns after February 28 are subject to the £100 fine as normal.
HMRC has already said it will accept Covid disruption as a reasonable excuse for people missing the deadline, although they'll still be hit with a fine.
Customers will then have to appeal the penalty by proving coronavirus has caused the delay.
More than 8.9million customers have already filed their tax return.
Your earnings are used to determine the amount of tax you owe for 2019/20 and the amount of any payments on account for 2020/21.
Jim Harra, HMRC’s Chief Executive, said: “Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments.
“Support is available at Gov.uk to help anyone struggling to meet their obligations.”
On Christmas Day this year, 2,700 Brits people filed their tax returns, in comparison to over 3,000 people who did the same thing last year.
Last year, HMRC hit hundreds of taxpayers with £100 late fines despite filing on time.
While in February, a woman got a £1,316 HMRC tax fine refunded after The Sun stepped in.
Source: Read Full Article