It is that time of year when the Paper Self Assessment Tax Return deadline is looming. The vast majority of self-assessment taxpayers use the online form to submit their tax returns. There are still approximately 6% of us, who prefer the traditional method of a paper tax return. If this is you, the deadline of 31st October 2020 is drawing closer.
If you normally complete a paper tax return, HMRC should have sent you a ‘notice of file’. This is a change from their normal procedure where HMRC would send a blank self-assessment form. This approach is intended to encourage more people to complete the online form, and was introduced earlier this year. If you need a copy of the form you can access one here.
Everybody still needs to complete a tax return, even if your finances have been impacted by COVID. If you are finding it difficult to pay your tax bill there may be support available to you.
We have outlined a number of tips to complete your tax return here, especially like many people, you have left it to the last minute.
Being organised will help immensely so you’re not chasing your tail. Get all your paperwork in order to avoid unnecessary stress. We suggest to get the following documents ready:
Keep these documents safe because HMRC may ask to see evidence of them.
One sure way to reduce your potential tax bill is to offset what you have spent. These include all the costs you’ve had to outlay for you to do your job and carry out the work required of you.
Getting this right will make sure you reduce your tax bill. This is where so many people don’t get it right and pay more tax than they should. Although the expenses need to be for business use, you can claim for a number of things especially if you work from home. If you work from home you can claim for household bills, or at least a proportion of them.
Make sure you claim for all the tools you use for you the job. This includes laptops, stationaries or if you’re a tradesman, hammers and drills etc. You can also claim for business travel, fuel, car insurance, mobile phone and other relevant bills
Most people will only need the SA100 form, although some people will need additional supplementary forms. This is particularly relevant if you’re a landlord receiving rental income or you have sold assets and are liable for capital gains tax. You can go onto the HMRC site to see what forms you need.
Check and double-check. HMRC report one of the most common reasons for getting fined is due to people completing incorrect tax returns. If you rush your form you leave yourself open to careless and avoidable mistakes. The more time you spend on the form, the more chance of getting it right first time.
If there are mistakes HMRC will decide if somebody has been deliberately misleading, or if they have taken reasonable care. If they are to issue a penalty, the penalty will be more severe if they think the mistake is deliberate.
If you’ve taken ‘reasonable care’ to complete your return and there is a mistake, HMRC may issue no penalty. On the flip side, if you have tried to reduce your tax bill and tried to hide it, HMRC may fine you up to 100% of what tax is due.
The deadline is set in concrete. It is midnight on 31st October, not a moment later! Even if you submit your return a few minutes late on 1st November, you will be fined £100. HMRC will then fine you £10 for each additional day, up to 3 months later. There are additional fines if you submit your return later than this.
HMRC will accept a few reasons for late submission. These include the death of a partner, serious ill-health and any issue with HMRC procedures.
If you are going to miss the deadline, consider submitting your tax return online. The deadline for online returns is 31st January 2021. You will need to register online via the HMRC website. If you are going to be late submitting the paper return, don’t submit it. HMRC will only accept the first return it receives.
It is crucial you have plans in place to pay your taxes when they are due. Your tax payment for the financial year 2019-2020 is not due until 31st January 2021. If your business has been impacted by the Coronavirus pandemic you can defer the tax due for up to 12 months.
The Winter Economy Plan is a Government support package for a number of schemes and initiatives to help protect people’s jobs and provide some financial assistance.
One of the initiatives is the Self-Assessment Tax Deferral scheme. This allows people to defer payment due from their 2019-2020 tax return for up to 12 months.