The new tax year began this year in a way that has never been seen before – the UK under lockdown as a result of the Covid-19 pandemic. Life however goes on, as do taxes!
This blog outlines a clear timeline of the tax year ahead and the important dates for you. As tax regulations are more likely than ever to change and penalties if you don’t submit your tax return either on time or incorrectly it’s important that you keep on top of the key dates. Why? So that you aren’t faced with the repercussions from HMRC and unexpected tax bills.
6th of April – the start of the new tax year
Some good news - tax free personal allowances stays the same at stays at £12,500 for this tax year.
By now you should have received your new tax code. As this can change each year it’s very important that you check your tax code is correct otherwise you could be paying too much tax during the year or worst case you under pay and you end up with an unexpected tax bill next year.
Your personal tax code is made up of letters and numbers referring to your tax allowance and is used by employers to determine the tax that is deducted. Check out our blog – ‘your tax code explained’ for more on this.
31st July 2020 : Payment on account deadline for 2019/2020 tax year
This is the date when you can make a second payment on account - a pre-emptive payment that goes towards your next tax bill based on last year’s tax bill so that you aren’t faced with a significant payment in January.
Please note that due to Covid-19 you may be able to delay making your second payment on account and you will not be charged interest or penalties so long as you pay it before 31 January 2021. Please see the HMRC website for more information.
You can pay your second payment on the HMRC online portal, by postal cheque or through a BACS transfer using online banking.
Midnight, 5th October 2020 – your deadline to register for self-assessment
This is the date that you need to register for self-assessment. This process does differ depending on whether you are employed, or self-employed. And, if you are self-employed whether you are doing it for the first time or whether you have submitted a self-assessment previously.
If you have never submitted a self-assessment before you will need to register online, and we advise that you complete it early this year as it can take time. We anticipate potential delays due to the circumstances surrounding Covid-19.
Once HMRC have received your registration, you will receive a letter from HMRC confirming your 10 digit Unique Taxpayer Reference which enables you to set up your account for the Self-Assessment online service. Please keep this safe as you are likely to use it for this tax year and those in the future.
If you are self-employed and have previously completed an online self-assessment you will need to complete as CWF1 Form.
If you are not self-employed have earnings beyond your employment income you will need to complete a SA1 form. This will identify what other income you have that you need to pay tax on including not just the income from your employment but also your pensions, savings, any rental income, income from Trusts or Employment benefits.
Midnight 31st October 2020 – This is the paper self-assessment tax return deadline
This deadline is three months earlier than the digital method of completion if you wish to submit a printed self-assessment form. Only 700,000 of the 11.7 million people who complete a self-assessment now do this by post and we do anticipate a gradual running down of this service as HMRC becomes increasingly digital. It is likely that this service will stop eventually. We recommend you consider moving to a digital submission sooner rather than later as a result and Klarity Tax can help you with this.
That said, the good news that is if you do miss this deadline you still can submit your tax return digitally up to three months later.
There is one exclusion to this when you have until midnight on 31 January 2021 - if you are a trustee of a registered pension scheme or a non-resident company. These returns cannot be done online and as a result you have an extension to 31st January 2021.
Midnight 30th December 2020 – Deadline for submitting your self-assessment tax return digitally if you want HMRC to automatically collect tax you owe from your wages and/or pension
There are eligibility criteria that must be met for this and it is sensible to get advice on this if you think you would benefit from this.
Midnight 31st January 2021- This is the deadline for submitting your self-assessment tax return digitally
10.4 million taxpayers now submit their self-assessment online. It’s important to complete this by 31st January otherwise you will face late payment penalties. HMRC reported that there are still 7% of all people who don’t submit their tax returns within the deadline and whilst you can appeal against penalties this will only be successful if you have a satisfactory reason why it is late
Midnight 31st January 2021 - The deadline for paying any tax that you have under paid in the previous tax year
If you do run to the wire on completing your online self-assessment, it’s important to realise that any tax that you owe will also need to be paid to HMRC by 31st January 2021. Again, if you owe anything and don’t pay it by 31st January you may face interest charges. Completing your self-assessment online early does enable you to understand any tax that is owed and spread the cost of paying it.
How your personal tax advisor can help
The 2020-2021 tax year is likely to be like no other due to Covid-19 and therefore if you need support navigating your way through this, Klarity tax can help. If you are a first timer or have been completing self-assessments for years but would like to concentrate on more important things your personal tax advisor takes away the strain and make sure meet all the deadlines and more importantly ensure there are ‘no surprises’. You can start the process today by just contact Klarity Tax and we will make it happen.