Taxman provides self-employed individuals extra time to file their tax returns
Originally written by Timothy Adler about small business
HMRC gives the self-employed more time to file their tax returns if they use Covid as an excuse for late filing.
This year, nearly 12 million self-employed, second-income people and landlords will have to file a personal tax return by the end of January.
Nearly 5.5 million of those 12 million self-assessed taxpayers have yet to file a tax return, with weeks remaining before the deadline.
> See also: The potential union calls for emergency aid for excluded self-employed
However, the tax officer is developing a simplified “Covid Excuse” form which the self-employed can use to miss the January 31 deadline for filing and paying taxes.
This will allow those who say they have a reason to be late filing because of the pandemic to avoid harsh penalties, with the Sunday Times citing sources that HMRC is planning a “very lenient” stance.
The decision will boost millions of self-employed people who are putting money aside to pay income tax at the end of the year but have had to use their savings to stay afloat.
According to the freelance organization IPSE, freelance incomes fell 30 percent to record lows in the past year. One in five self-employed people have to borrow money to pay their tax bills, said IPSE.
> See also: City mayors warn of a mental health pandemic among the self-employed
In the meantime, Chancellor Rishi Sunak is reportedly considering extending the deadline to possibly March for all taxpayers.
Late filing penalties typically start at £ 100 for three months. If you have not filed by April 30th there will be an additional fine of £ 10 per day up to £ 900 from then on. Filing six months late will usually result in a fine of £ 300 or 5 percent of tax whichever is higher. If you are 12 months late, you will be charged an additional £ 300 or 5 percent.
Even if you successfully appeal to avoid late filing penalties, you will still be penalized with late payment penalties. This is 5 percent of the tax not paid after 30 days, another 5 percent after six months and another 5 percent after 12 months.
Approximately 3 million people have also been excluded from any government funding.
Excluded UK, a campaign group representing the 3 million excluded from the Self-Employment Income Support Scheme (SEISS), is demanding that its members waive their 2019-20 tax bills as compensation.
Phil Hall of the Association of Accounting Technicians (AAT) told the Daily Telegraph, “Three bans and the animal regime have certainly prevented many people from reporting their tax information to their accountants in the normal way. When you add the effects of coronavirus disease, it’s pretty obvious that the number of taxpayers filing at the end of this year will be much higher than in previous years. “
HMRC told the Sunday Times, “We want to encourage as many people as possible to file on time, even if they cannot pay their taxes immediately. However, if a customer is unable to do so due to the effects of Covid-19, we accept that they have a reasonable apology and will cancel penalties provided they can file them as soon as possible. “
Self Employed Checklist – A Guide for Small Businesses
Taxman gives self-employed people more time to file their tax returns