Self Assessment tax return payments must be made by midnight January 31 and these bills are usually associated with the self-employed. Any sole traders who earned more than £1,000 over the previous year or partners in a business partnership must pay their tax within the next few days.
Should the deadline be missed, an initial penalty of £100 may be issued and if it is continuingly delayed additional amounts and interest will be added.
However, UHY Hacker Young, the national accountancy group, looked into HMRC’s latest figures and found HMRC cancelled over 60 percent of late payment penalties last year.
As a result of these findings, UHY Hacker Young urged taxpayers to appeal if they feel any fines levied against them were wrongly imposed.
to put this into monetary terms, UHY Hacker Young revealed that of the £275million in penalties levied last year, £167million was later completely cancelled.
READ MORE: Self Assessment tax alert: Self-employed to face double taxation
“HMRC certainly gets it wrong at times and will correct its mistakes when presented with the evidence.
“Ultimately, taxpayers will be responsible for spotting any mistakes straight away, as once HMRC receives a payment, in their eyes the case is closed and won’t be looked at again.”
UHY Hacker Young highlighted taxpayers can set up an online payment plan for tax bills up to £30,000 to spread repayments over a 12-month period.
Since October 2020, £69.1m in overdue tax has been rescheduled by nearly 25,000 taxpayers via these ‘self-serve’ Time to Pay arrangements according to their analysis.
Tax affairs and returns themselves can be very complicated to manage but fortunately the Government provides guidance on the following:
- Capital Gains Tax if a person sold certain assets like property or shares
- Expenses if a person’s an employee or self-employed
- Child Benefit if a person’s income is over £50,000
- Tax on income from renting property
- Tax on savings interest
- Tax returns for business partnerships
- Tax on income from abroad – or on UK income if a person lives abroad
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