Coronavirus (COVID-19) tax return update
The coronavirus pandemic has caused the government to introduce a range of measures to support the self-employed and small businesses that fall into financial hardship as a result of the crisis.
If you have a 'payment on account' to make in July 2020, you can defer this until January 2021. You can also defer VAT payments that are due.
Anyone who missed the January 2020 self-assessment deadline has also been given a four-week extension to file their tax return, starting 26 March.
Important Dates for 2020
6 April: first day of the new 2020-21 tax year
Depending on what has been agreed in the Budget (scheduled for Wednesday 11 March), new tax rates and allowances for 2020-21 will come into force from today, so make sure you know if anything has changed.
If you have all of the information you need, you could file your 2019-20 tax return from this date.
31 July 2020: second payment on account due
Self-employed workers who pay tax through payment on account will have to make their second payment by midnight on 31 July - although, for 2020, this payment can be deferred until 31 January 2021 thanks to emergency coronavirus measures.
The amount you pay is an estimate based on your earnings in 2018-19. If you still owe tax (for example, if you earned more than you did in 2017-18), a further 'balancing payment' will be due on 31 January 2021.
This is also when you'll have to make your first payment to cover the 2020-21 tax year.
5 October 2020: register for self-assessment
If you've never submitted a self-assessment tax return before, you must register by 5 October 2020 in order to submit for the 2019-20 tax year.
This will allow you to get your 'Unique Taxpayer Reference' (UTR) number and activate code in time which you need to file your first return.
31 October 2020: paper tax returns due
This is the deadline for filing a paper tax return, However, if you receive a notice from HMRC that you must file a tax return after 31 July 2020, you'll need to send back the completed form within three months of the date issued on the notice.
If you miss the deadline for filing your paper tax return, don't be tempted to try and file it late. You'll still have time to complete an online tax return instead - as these aren't due until 31 January. But don't submit both.
30 December 2020: opt into PAYE
If you file your tax return online and also have earnings taxed under PAYE, you can opt to have overdue tax collected via your tax code throughout the following year.
However, to be eligible your tax bill must be less than £3,000 and you must file your online return by this date. The advantage of this is that any tax payable would be paid over 12 months from April 2021, rather than a single lump sum by 31 January 2021.
Fines for late tax returns
It's important to be aware that filing your tax return late, or failing to pay the tax you owe on time, will probably mean you'll face extra penalty fees and interest charges.
1 day late
£100 for one day after deadline
Up to 3 months late
£10 for each additional day (capped at 90 days), plus £100 initial fine - maximum of £1,000
6 months late
Either £300 or 5% of the tax due (whichever is higher), on top of the penalties above
12 months late
An additional £300 fine, or 5% of the tax due, plus the above penalties. In the most serious cases, you may be fined 100% of the tax due
erious cases, you may be fined 100% of the tax due