Martin Lewis provides pension advice for the self-employed
Self-employed workers have been hit particularly hard by coronavirus this year and as such, falling behind on their tax obligations may be the last thing they want to deal with going forward. If going by last year’s figures, there may be evidence for a tax paying rush emerging before January even arrives.
According to HMRC’s data, a record high of 22,035 taxpayers submitted their self assessment tax returns on Christmas eve, with 3,003 submitting theirs on Christmas Day and a further 9,254 filed on Boxing Day.
This year, with all of the negative news people have had to deal with, similar levels of early payments could be seen.
While this is prudent and will be beneficial for many self-employed workers simply trying to get ahead of their financial obligations, Ed Molyneux, the CEO and co-founder of FreeAgent urged those affected to cut themselves some slack over the Christmas period.
Ed detailed there is no need to file tax returns “over turkey”, as he explained: “A lot has changed since the last January self assessment deadline.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
“We’ve seen an unprecedented number of challenges that few would have envisaged 12 months ago, and it is small business owners and self-employed people who have been hit the hardest.
“It’s important that people running these types of businesses try to take some time out to enjoy a well deserved break over the festive period.”
While Ed urged affected taxpayers to rest over the Christmas period, he acknowledged the deadline is fast approaching: “However, they also need to ensure that they don’t miss the self assessment deadline and cause themselves unnecessary pain.”
Fortunately, Ed went on to provide advice on how people should prepare for the January deadline.
SEISS complexities hold back over 415k claims – extensions called for [INSIGHT]
Rishi Sunak ‘must’ fix SEISS issues – MPs claim you ‘have been failed’ [WARNING]
SEISS alert: New criteria ‘significantly different’ – full details [EXPERT]
These tips revolved around getting organised and utilising public sources where applicable:
- get prepared – Firstly, register with HMRC and give yourself a few weeks to complete the process. You won’t be able to submit your tax return without doing this.
- gather your paperwork – Secondly, you’ll need to gather all your relevant information before you can file your tax return. Depending on your circumstances, this could include proof of self-employed income, a P60, P45 or a P11D. As a basic rule, you’ll need to show any money you’ve received or earned from pretty much anywhere – including wages from a job, income from a trust, and interest from your bank account (except an ISA). If you’re a limited company shareholder, you’ll also need to provide proof of any dividends received during the tax year. You don’t want to be gathering this paperwork at the last minute, so make sure this is all in order ahead of time.
- Take advantage of helpful resources online and get professional advice if you need to – Make sure to consult HMRC’s website or get help from a professional accountant or tax advisor to make sure you understand all of the regulations in place specific to your business
- Make next year easy by keeping your accounts up to date – if you keep your accounts up to date all year, then this will help you to avoid having to rush to meet the deadline for filing your tax return. This way you can enjoy your festive break with nothing hanging over your head!
Ed concluded: “We all deserve a rest this Christmas, so make sure you get yourself prepared and thank yourself on Christmas day when you are able to sit back and soak up the joy of a stress-free celebration with those who matter most to you.”
It is important to pay this bill by the deadline as penalties can be levied if it is missed.
Penalties of £100 will be issued if a return is up to three months late.
If it is still not paid beyond this more will be added to the fine and interest will also be levied, furthering the cost.
Self assessment tax bills can be paid online but they can also be covered on the same day through online or telephone banking, CHAPS, debit or corporate credit cards or at a physical bank or building society branch.
It should also be noted January 31 2021 falls on a sunday.
This means payees will need to make sure their payment reaches HMRC on the last working day before this, which is Friday, January 29.
When paying online, it should also be remembered that HMRCs payment services may slow during busy periods.
Source: Read Full Article