A quick reminder about your 2019-20 Self-Assessment Tax Return
Despite the difficulties caused by the Covid-19 Pandemic, the filing deadline remains at 31st January 2021 and Returns must be filed on-line.
HMRC have no plans to waive late filing penalties – Jim Harra, Chief Executive and First Permanent Secretary, responsible for HMRC states that their Self-Assessment message this year is a simple one:-
“We want to encourage as many “customers” as possible to complete their tax returns by 31 January 2021, even if they can’t pay in full, because filing their Return is key to crystallising their Self-Assessment liability and being able to get our support, if they need it, to pay their tax”.
The late filing penalty for a personal SA Return is £100. The late filing penalty for Partnership Return is £100 multiplied by the number of partners. (A husband and wife partnership face penalties of £400 if they do not file their 3 Returns on time). Late Filing Penalty Notices will automatically be issued if the Returns are late and appeals may be accepted if the delay has been due to pandemic-related personal or business disruption as a reasonable excuse – but do not rely on this !!
Many SA taxpayers will have a normal level of income for 2019-20 even if the impact of the pandemic has radically reduced their income after 5th April 2020. In addition the tax due on 31st January 2021 may well be greater if the 2nd Payment on Account for the year, (that was due on 31st July 2020), was deferred until 31st January. No interest will be charged on the deferment but interest will be charged on any liability that remains outstanding after 31st January 2021.
31st January 2021 is also the date on which the 1st Payment on Account is due for the following tax year, 2020-21. This is normally 50% of the full liability for 2019-20 but if your income has reduced, you can apply to reduce the Payment on Account.
In assessing whether your income has reduced, do have regard to the fact that any government support grants, furlough receipts etc., are all classed as taxable income in 2020-2021 in addition to your other income or earnings.
If you cannot pay your 2019-20 tax by 31st January, do try to make payment by 28th February 2021 as HMRC can impose a 5% surcharge on any amount still outstanding at that date.
DAVID HODGSON, MBE
Chartered Accountant
