Four million taxpayers are yet to submit their self-assessment tax return and pay any tax they owe before the deadline on 31 January, HMRC has revealed.

More than 12.2 million people are expected to complete a tax return for the 2020 to 2021 tax year – which means around a third of these taxpayers still haven’t filed the document.

Tax penalties waived for one month

Earlier this month, HMRC announced it would waive penalties for one month for late filing of tax returns and late payments, to ease the pressure on taxpayers and their agents.

The changes mean you won’t receive a late filing penalty if you submit your self-assessment tax return online by 28‌‌ ‌February 2022. And you won’t face a late payment fine if you pay your tax in full or set up a payment plan by 1‌‌ ‌April 2022.

But the deadline to file and pay remains 31 January and you’ll still be liable for interest from 1 February, so it’s better to pay on time, if you can.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We know some customers may struggle to meet the self assessment deadline on 31 January, which is why we’ve waived penalties for one month, giving them extra time to meet their obligations.

“And if anyone is worried about paying their tax bill, they can set up a monthly payment plan online – search ‘pay my self assessment’ on gov.uk.”

Despite the deadline being just days away, there are no changes to the opening times for HMRC’s self-assessment helpline. The service won’t be open on Saturday 29 or Sunday 30 January and will run as normal until 6pm on Monday 31 January.

Do you need Time to Pay?

You can spread your tax payments over time if you set up a Time to Pay (TTP) plan. You can arrange this online after you’ve submitted your return, if you’re a self-assessment taxpayer with up to £30,000 of tax debt.

If you owe more than £30,000, or need longer to pay, you should call the Self Assessment Payment Helpline on 0300 200 3822.

Tax returns and Covid-19

Your 2020/21 self-assessment tax return covers earnings and payments during the Covid-19 pandemic. You’ll need to declare if you received any grants or payments from the coronavirus support schemes up to 5 April 2021, including:

  • Self-Employment Income Support Scheme (SEISS)
  • Coronavirus Job Retention Scheme (CJRS)
  • Other Covid-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme

But you shouldn’t report the £500 one-off payment for working households receiving tax credits in your self-assessment.

It’s important that you check and make any changes to your tax return to make sure you’ve reported any SEISS or other Covid-19 support payments correctly.

Our thoughts

The news that almost a third of tax returns are still outstanding across the UK is astonishing, as the deadline is only a few days away.

I imagine there’s a combination of reasons for this, including people not getting the information to their tax advisers or accountants. Also, the accountants and advisers might be struggling to process the returns at the same rate as they normally would because of staff absences due to Covid-19. So, a perfect storm.

We believe this is one of the reasons HMRC wants to switch to Making Tax Digital (MTD), because it will prevent this type of bottleneck.

But a big thank you to our clients, who are generally pretty good at giving us the information we need to complete their tax returns on their behalf. Most of them don’t want to rely on the late filing penalty extension.

Need help with your tax return?

At Churchill Taxation, we can take away your tax return headache by tackling this time-consuming task on your behalf. Our skills and experience mean you won’t need to worry about mistakes and missing information – and can rest assured your document will be completed correctly.

Get in touch with our team of tax advisers today on 07813 434195 or email: stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation