Phone Lines Stay Open as Tax Return Deadline Approaches
As the self-assessment tax return deadline draws near, the UK’s tax authority is extending support to ensure that individuals can meet their obligations.
Extended Support from HM Revenue and Customs (HMRC)
– Final Day Support: On the last day before the January 31st deadline, HMRC is keeping phone lines open and extending webchat services significantly. This is crucial for millions of self-employed individuals and those with multiple income sources who must file their 2024-25 tax return online.
– Previous Trends: Last year, a staggering 1.1 million people missed the deadline, often citing unusual excuses—some even claimed to be in remote locations like mountains or sailing the seas.
– Penalties for Late Filers: Those who do not complete their tax return by the end of Saturday face an automatic £100 fine, alongside potential additional penalties if their tax return remains unfiled.
Who Needs to File a Tax Return?
While many individuals pay their taxes through PAYE (pay-as-you-earn), certain circumstances necessitate the filing of a tax return:
– Who Must File:
– Individuals earning over £1,000 from self-employment, property letting, or land.
– Those transitioning to PAYE for the high income child benefit charge may not need to file this year.
– Missing Opportunities: A significant number of higher or additional rate taxpayers—around 800,000—risk missing out on valuable tax relief if they do not declare personal pensions or participate in “relief at source” schemes.
Understanding the Penalties
Filing the return is only one part of the puzzle; obligations extend to ensuring any tax owed is settled:
– Key Penalties:
– An immediate £100 fixed penalty applies even if no tax is owed.
– After three months, daily fines of £10 may accumulate, up to a total of £900.
– Additional penalties of 5% on the tax owed may occur at the six and twelve-month marks.
– Payment Options: For those unable to pay their tax bill in full by the deadline, HMRC offers the possibility to establish a time to pay arrangement, provided the amount owed is under £30,000.
Be Aware of Scams
Taxpayers should remain vigilant against scams, as criminals often impersonate HMRC representatives, threatening individuals with unpaid tax bills or offering fraudulent rebates.
Upcoming Changes: Making Tax Digital
Starting in April, new rules will require taxpayers earning more than £50,000 from self-employment or rental income to comply with Making Tax Digital regulations:
– New Requirements: Taxpayers will need to maintain digital records using approved software and submit quarterly summaries of income and expenses to HMRC.
– Future Adjustments: The income threshold will decrease to £30,000 in April 2027, and further to £20,000 in April 2028.
– Preparation Needed: “Making Tax Digital represents the most significant tax transformation since self-assessment, and time is running short to prepare,” warns Victoria Todd from the Low Incomes Tax Reform Group.
As the deadline approaches, it’s essential for taxpayers to utilize the available services from HMRC and ensure compliance to avoid unnecessary penalties.