It’s about that time of year… and with just under three months to go to complete your tax return for the 2019/20 tax year, now really is the time to get it sorted (if you haven’t already).
We know this is still a very difficult time for everyone, and we want to do what we can to help and support you every step of the way.
Below we’ve captured some of the most important information you’ll need to help you get started.
23:59 on 31st January 2021, about three months away.
You’ll receive an automatic £100 fine from HMRC (and no-one wants that). Plus, there are more penalties the longer you leave it, so best to get it done sooner rather than later, otherwise the fines and interest will just keep building up.
Remember, this applies even if you don’t actually owe any tax. If you’re registered as self-employed and earned at least £1,000 within the tax year, make sure you complete your return.
You need to pay your tax bill by 23:59 on 31st January 2021, but you can also apply for an extension.
As part of the support measures announced by the UK government in response to Covid-19, you can now apply to spread the cost of your tax bill for the 2019/20 tax year over 12 months. Once you’ve submitted your tax return, you can use the online self-serve ‘Time to Pay’ service through HMRC to set up a direct debit to pay in monthly instalments.
To qualify, the total amount of tax you owe must be £30,000 or less, and you must have:
Also, bear in mind that you must be able to maintain your ‘Time to Pay’ commitment - so commit to what you can afford. If, for whatever reason, your circumstances change after making the arrangement, you must contact HMRC as soon as possible.
Tip: If you’ve been using Coconut to keep track of all your income and expenses, you’ll be able to get all the numbers you need straight from the app.
Sadly scams are on the rise so, now more than ever, you need to be on the ball. If someone gets in touch claiming to be from HMRC, saying that you have outstanding tax bills to pay, or that a tax refund is owed and asks you to click on a link or give away personal information please do not respond. And forward any suspicious emails claiming to be from HMRC to email@example.com.
We’ve got a thread on this over on Coconut Bite, so if you come across any, please share them here too so others can look out for them too.
We always recommend speaking with an accountant or bookkeeper if you have any questions or feel unsure on anything. We're also happy to help too, so feel free to get in touch with us by leaving your questions in Coconut Bite, dropping us a line via the in-app chat or sending an email to firstname.lastname@example.org.
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As part of HMRC’s Making Tax Digital, sole traders will soon be required to complete 4 tax submissions per year instead of 1.
Take a look at the latest sole trader tax rates for the 2021/22 as well as our advice on how to prepare for the new tax year.