Auto Amazon Links: No products found. Blocked by captcha.
On the final day before the self-assessment deadline, HM Revenue and Customs (HMRC) in the UK has expanded its phone and webchat support to assist taxpayers who have yet to file their returns. This move comes as millions of self-employed individuals or those with multiple income sources are required to submit their 2024-25 tax returns online by the end of January. Last year, approximately 1.1 million people missed the deadline, prompting HMRC to bolster its resources for those leaving their submissions until the last minute.
Beyond the filing deadline, individuals who fail to complete their tax return will face an automatic penalty of £100, with the possibility of additional charges if delays continue. While HMRC reports that over 10 million people have already filed their returns, there is always a surge of last-minute submissions on the final day. To handle this demand, digital services such as an enhanced webchat and the digital assistant tool remain available throughout the day, while a telephone helpline, usually closed on weekends, operates between 09:00 GMT and 16:00 GMT. Despite these efforts, long waiting times on the phone are expected, reflecting ongoing criticism of HMRC’s call response times.
The requirement to file a self-assessment tax return applies mainly to those who earn income from sources beyond standard PAYE payroll deductions. This includes individuals earning over £1,000 in self-employment income or from renting out property or land within the 2024-25 financial year. Notably, some people who previously needed to file because of income over £150,000 or liabilities such as the high income child benefit charge may no longer need to do so, following recent changes. However, incomplete or missing tax returns could mean taxpayers overlook valuable reliefs. Sir Steve Webb, a partner at consultancy LCP, estimates that around 800,000 higher-rate taxpayers might be missing out on extra tax relief by failing to report personal pensions or relief at source schemes.
Filing the return only addresses part of the obligation; payment of any tax due must also be made by January 31. Alice Haine, a personal finance analyst at Bestinvest, emphasizes the importance of having sufficient cleared funds in one’s bank account before the deadline: “Filing the return is only half the battle – you must also pay any tax owed for the 2024-25 tax year by January 31 which will require sufficient cleared funds available in your bank account ahead of the deadline.” Taxpayers unable to pay the full amount on time may be eligible for a “time to pay” arrangement if they owe less than £30,000 and meet other criteria. Penalties for late filing and payment can accumulate significantly over time, starting with a fixed £100 fine, daily penalties after three months, and percentage-based fines after six and twelve months, along with interest on any unpaid balances.
HMRC considers reasonable excuses for missing the deadline, such as serious illness or bereavement, which can help taxpayers avoid fines. However, false excuses like being on a mountain or sailing around the world are less likely to be accepted. Taxpayers are also advised to remain vigilant against scams, as criminals sometimes pose as HMRC agents, threatening individuals with false tax bills or offering fraudulent rebates.
Looking ahead, a significant change is set to begin in April with the rollout of Making Tax Digital (MTD) for income tax. From then on, those earning more than £50,000 from self-employment or rental income will need to keep digital records using approved software and submit quarterly updates to HMRC, replacing the current self-assessment process. The income threshold for these requirements will lower to £30,000 in April 2027 and then to £20,000 in April 2028. Victoria Todd from the Low Incomes Tax Reform Group described this shift as “the biggest tax change since self assessment” and highlighted the urgency for taxpayers to prepare themselves ahead of the transition
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.