Martin Lewis provides advice on self-employed income support
Self Assessment tax return payments must be made by midnight January 31 and these bills are usually associated with the self-employed. Any sole traders who earned more than £1,000 over the previous year or partners in a business partnership must pay their tax within the next few days.
Should the deadline be missed, an initial penalty of £100 may be issued and if it is continuingly delayed additional amounts and interest will be added.
However, UHY Hacker Young, the national accountancy group, looked into HMRC’s latest figures and found HMRC cancelled over 60 percent of late payment penalties last year.
As a result of these findings, UHY Hacker Young urged taxpayers to appeal if they feel any fines levied against them were wrongly imposed.
to put this into monetary terms, UHY Hacker Young revealed that of the £275million in penalties levied last year, £167million was later completely cancelled.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
It should be noted for the upcoming deadline, HMRC has confirmed that personal or business “pandemic-related” disruption may be a reasonable excuse for late filing of tax returns.
UHY Hacker Young pointed out HMRC’s more understanding approach towards late filing suggests this may also be the case with the late payment of tax.
Of course, they highlight people should pay their bills on time where they can.
Graham Boar, a Partner at UHY Hacker Young, commented on this year’s unique circumstances: “It’s extremely important that taxpayers appeal any penalties they do not agree with.
Furlough warning: Jobs may be ‘gone forever’ as scheme ends [WARNING]
Martin Lewis calls on Rishi Sunak to change SEISS eligibility rules [EXPERT]
Self assessment tax return: HMRC urged to extend deadline ‘ASAP’ [INSIGHT]
“HMRC certainly gets it wrong at times and will correct its mistakes when presented with the evidence.
“Ultimately, taxpayers will be responsible for spotting any mistakes straight away, as once HMRC receives a payment, in their eyes the case is closed and won’t be looked at again.”
UHY Hacker Young highlighted taxpayers can set up an online payment plan for tax bills up to £30,000 to spread repayments over a 12-month period.
Since October 2020, £69.1m in overdue tax has been rescheduled by nearly 25,000 taxpayers via these ‘self-serve’ Time to Pay arrangements according to their analysis.
Graham concluded: “Individuals who fear they will be unable to afford their upcoming tax bill need to act now and begin negotiating with HMRC.
“They should be able to stagger their payments through a Time to Pay arrangement but that’s down to the taxpayer to arrange.”
Outside of the self-employed community, tax returns may need to be completed and paid by those who receive untaxed income such as:
- Money from renting out a property
- Tips and commission
- Income from savings, investments and dividends
- Foreign income
Tax affairs and returns themselves can be very complicated to manage but fortunately the Government provides guidance on the following:
- Capital Gains Tax if a person sold certain assets like property or shares
- Expenses if a person’s an employee or self-employed
- Child Benefit if a person’s income is over £50,000
- Tax on income from renting property
- Tax on savings interest
- Tax returns for business partnerships
- Tax on income from abroad – or on UK income if a person lives abroad
Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to [email protected]
Source: Read Full Article