HMRC warns 2.3m self-employed to file tax returns by end of month or face penalties

HM Revenue and Customs (HMRC) is warning more than two million taxpayers still need to file their Self Assessment returns by the end of February in order to avoid paying a penalty.

New figures show that 10.2 million customers filed their 2020/21 tax returns on time by the January 31 deadline, however some 2.3 million remaining customers now only have until February 28 to submit their late tax return and avoid a penalty charge.

HMRC previously announced it was waiving penalties for one month for late filing of tax returns and late payments in recognition of the disruption to self-employed workers as a result of the ongoing coronavirus.

This means anyone who was unable to file by January 31 will not receive a late filing penalty – provided they file by February 28.

However, interest will be charged from February 1 on any outstanding amounts, as usual, so it is still better to pay as soon as possible.

HMRC said more than 630,000 customers filed on the January 31 deadline day and the peak time was between 4pm and 4.59pm, when 52,475 customers completed their Self Assessment.

Some 20,947 customers completed their tax return in the final hour before midnight.

Myrtle Lloyd, HMRC’s director general for customer services, said: “We’re waiving penalties this year, to give those who missed the deadline an extra month.

“And customers can set up a monthly payment plan online if they’re worried about paying their tax bill. Search ‘self assessment’ on to find out more.”

Who needs to complete a Self Assessment tax return?

HMRC says customers must complete a Self Assessment return if they:

  • earned more than £2,500 from renting out property
  • received, or their partner has received, Child Benefit and either of them had an annual income of more than £50,000
  • received more than £2,500 in other untaxed income, for example from tips or commission
  • are a self-employed sole trader whose annual turnover is more than £1,000
  • are an employee claiming expenses in excess of £2,500
  • have an annual income of more than £100,000
  • have earned income from abroad that they need to pay tax on

The 2020/21 tax return covers earnings and payments during the coronavirus pandemic.

Customers will need to declare if they received any grants or payments from the Covid-19 support schemes up to April 5, 2021 on their Self Assessment, as these are taxable.

These include:

The £500 one-off payment for working households receiving Tax Credits should not be reported in Self Assessment.

HMRC recognizes that some customers may be worrying about paying their tax bill and advises anyone worried about their finances to access support on the GOV.UK website here.

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How to pay your tax bill

Various payment options include:

  • paying through a customers’ tax code (PAYE customers only)
  • Payment on Account
  • setting up an online monthly payment plan (self-serve Time to Pay)
  • paying by debit or corporate credit card
  • paying at a bank or building society

Customers should contact HMRC if they have concerns about paying their tax bill.

Visit GOV.UK for a full list of payment options and the eligibility criteria here.

HMRC is also warning customers to be aware of copycat websites and phishing scams.

HMRC advises customers to always type in the full online address to get the correct link for their Self Assessment tax return securely and free of charge.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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