Tax Return Reminder

25 Nov 2021

Why completing your outstanding return sooner rather than later is recommended

As the deadline for self assessment fast approaches, our recommendation is always to prepare beforehand. This seems particularly prudent now more than ever, as with the effect that Covid has had on many businesses, planning ahead and being ready for the new year has never been more crucial. One such example of this is that until your return has been completed, there is no accurate estimate of these payments. Therefore, no way to accurately prepare for these costs.

Why beating the filing deadline is important?

Although the filing deadline is 31 January 2022, on the same date you may also be required to pay any arrears of tax or NIC for 2020/21 and make a possible payment on account for the next tax year, 2021/22.

As well as this potential extra cost, if you miss the filing deadline, you will be subject to penalties and possible interest charges. We detail this further below.

Other planning considerations

If your income during these difficult times has reduced, this may mean that your payments on account for 2021/22 could be reduced.

By preparing your return earlier, you will also have time to consider how you are going to fund tax payments due 31 January 2022, and if you need support, time to contact HMRC's payment helpline to agree a deferred payment scheme.

A reminder of late filing penalties

If you do not file your 2020/21 self-assessment tax return by 31 January 2022, you will have to pay a penalty. If you delay sending in your tax return by:

  • 1 day – you will have to pay a penalty of £100
  • 3 months – you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900)
  • 6 months – you will have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater
  • 12 months – you will have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe.

These penalties are in addition to any penalties for paying your tax late.

Please get in touch

It is always better to plan ahead, now more so than ever. With the way your payments on accounts could be affected due to the pandemic, it is our advice that you begin preparing (and filing) your returns early to potentially plan ahead for the new year.

If you would like help with any of our services contact us to speak to one of the team.

Call us on 01753 888211

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