HM Revenue and Customs (HMRC) has warned that four million customers are yet to submit their completed Self Assessment tax return and pay any money owed - with just days to go before the January 31 deadline.
In total, more than 12.2 million customers are expected to file a return for the 2020/21 tax year and HMRC is urging the millions of customers still to submit their return, pay any outstanding liabilities or set up a payment plan, to do so ahead of the deadline as interest will be applied to all outstanding balances from February 1.
However, anyone unable to file by the January 31 deadline will not receive a late filing penalty if they submit by February 28.
Interest will be charged from February 1 on any amounts outstanding, as usual, so it is still better to pay on time if possible.
Myrtle Lloyd, HMRC's director general for customer services, said: "We know some customers may struggle to meet the self-assessment deadline on January 31 which is why we have waived penalties for one month, giving them extra time to meet their obligations.
"And if anyone is worried about paying their tax bill, they can set up a monthly payment plan online - search 'pay my self assessment' on GOV.UK."
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:
- Self-Employment Income Support Scheme (SEISS)
- Coronavirus Job Retention Scheme (also known as the furlough scheme)
- Self-isolation payments
- Local authority grants
- Eat Out to Help Out scheme
The £500 one-off payment for working households receiving Tax Credits should not be reported in Self Assessment.
Even if customers submit their completed tax return now, they do not have to pay any tax owed until January 31, 2022.
HMRC recognises 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.
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 www.gov.uk/hmrc to get the correct link for their Self Assessment tax return securely and free of charge.
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