Self-Assessment Tax Return – can you afford to pay?

  • 15th January 2021

The Self-Assessment tax return deadline is looming but for some people, this may be a bill that you can ill afford to pay at the moment.

In his Winter Economy Plan the Chancellor announces if you have less than £30k tax to pay in January, there could be an option to spread the liability over 12 months subject to criteria being met.

If you need to take advantage of this option, as long as you meet the criteria, then you should still submit your tax return at the end of January and then make an online application to spread out your payments.

https://www.access.service.gov.uk/login/signin/creds

You should be aware that interest at 2.6% will continue to be applied to any outstanding balance but at least it avoids a 5% late payment penalty.

Above the £30k threshold

If your tax return is above to £30k threshold, then you can contact HMRC to discuss setting up a ‘time to pay’ arrangement. You need to call the helpline on 0300 200 3822 to speak to HMRC about this.

Payments on Account

If you have interim payments on account to make and have seen a reduction in your income resulting in a decrease in your anticipated income tax liability, it may be worth considering reducing those payments in line with your expected income.

Be aware of Fraud

Watchdog has been reporting on an increase in fraud relating to self-assessment tax returns, particularly for those who may be submitting a return for the first time.

If someone calls, emails or texts you claiming to be from HMRC, please do be aware. Some of these may offer help or even threaten with legal action. If you are not sure, contact HMRC directly. Go to the HMRC website and log in through the links. Never click on a link through an email you have been sent.

Contact the HMRC Fraud Line on 0203 080 0871

Submission deadline

Remember there has not been any relaxation in the requirement to submit your tax return by the 31st January. Not only will failure to meet the deadline incur late filing penalties, it will also make it harder to reach time to pay agreements.

Finally….

If you need any help with your self-assessment tax return or any accountancy, tax or wealth management and planning, then please do contact us for a no obligation initial consultation.

All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.