Self Assessment tax return: When is the deadline? Will you have to pay late fees?
Self Assessment tax return forms explained
Self Assessment tax returns are submitted by almost 12 million people each year in the UK. These forms are a crucial part of the system HM Revenue and Customs uses to collect Income Tax on one’s earnings. The tax form for last year must be submitted soon – but when exactly is the deadline and will you have to pay late fees?
Self Assessment tax returns are used by HMRC to calculate tax on a persons’ income.
Normally, tax will be deducted automatically from a person’ wages, pensions or savings, which is known as PAYE.
If you receive any other income, you will likely be required to report this to the HMRC through the Self Assessment tax return once a year.
Last year, more than 11.5 million people across Britain submitted these forms, many of them self-employed workers.
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Self Assessment tax returns must be submitted by all individuals who in the last year from April 6 to April 5 were self-employed as a “sole trader” or earned more than £1,000, before taking off anything you can claim tax relief on.
Partners in a business partnership must also submit a Self Assessment tax return.
You will not usually need to submit if your only income is from your wages or pension.
But you may be required to submit a form for any other untaxed income you may receive including money from renting out a property, tips and commission, income from savings, investments and dividends and foreign income.
Typically you will be sent a tax return if you have untaxed income from investment, land or property, or from overseas.
You will also be sent a form if you make capital gains above the annual exempt amount, which is £12,000 for 2019/2020 and £12,300 for 2020/2021.
Anyone required to fill in a tax return for last year will need to do so this year.
Pensioners who receive reduced age-related allowance may receive a shorter version of this form to submit.
However, anyone who believes they should fill in this form should take responsibility to declare all taxable income for themselves each year.
For those who receive a form, they must submit it, regardless of whether you owe tax or not.
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When is the Self Assessment tax return deadline?
Taxpayers who usually file an online self-assessment tax return and have not yet completed this task for the 2019/20 tax year, which ended on April 5, 2020, have until 11.59pm on January 31, 2021, to do so.
This deadline applies to the following situations:
Eligible taxpayers who have not already filled in an online Self Assessment tax return for the 2019/2020 tax year.
Those who were due to make an “on account” (advance) payment by July 31, 2020.
Those who have any remaining tax owed from 2019/2020 ta year, unless a repayment plan has been agreed, as well as those making their first payment on the 2020/2021 tax year.
Will you have to pay late fees if you miss this deadline?
The HMRC is encouraging people to file on time, however, the organisation has announced no late fees will be charged if the forms are filed on or by February 28, 2021.
You can still file after this deadline and avoid charges if you’re delayed due to a coronavirus-related problem, although HMRC won’t confirm exactly what scenarios this might apply to in practice.
Any outstanding tax bills will need to be paid by this time.
You will begin accruing interest at a rate of 2.6 percent on any unpaid tax from February 1, 2021, though additional penalties will not kick in until 30 days after the deadline.
Those who miss this deadline will face a fine of £100 if the return is up to three months late.
For any submissions after three months late, they will likely have to pay more and will also be charged interest on late payments.
Further penalties of £10 a day are applied after three months, up to a maximum of £900.
After six months, will receive a further penalty of five percent of the tax owed or £300 (whichever is greater), which is repeated at the 12-month period.
Extra penalties are levied in some cases with interest being charged right away.
You will be fined five percent of the unpaid tax after 30 days, plus five percent after six months and again after 12 months.
Anyone concerned about not being able to afford their tax bill should contact the HMRC as soon as possible to avoid late payment penalties and arrange a repayment plan to spread the payments over a period of time.
You will need a reasonable excuse for not paying this tax on time, such as something unexpected or out of your control.
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