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Self-employed or a high earner? Don't miss the impending self-assessment tax return deadline

Self-employed or a high earner? Don't miss the impending self-assessment tax return deadline

If you're one of the millions of taxpayers still to file their online self-assessment tax return, you've less than a month until the deadline. Here's what you need to do to avoid a £100 fine.

You have until 11.59pm on Monday 31 January 2022 to send HMRC an online tax return for the 2020/2021 tax year, which ended on 5 April 2021.

You must act soon as those who miss the deadline face fines of at least £100, although the tax office has granted a one month extension (see below for more info). Any coronavirus-related deferral options available last year to those who needed to make an 'on account' payment no longer apply as of 6 July 2021.

See our Tax and Benefits guides to check you're paying the right tax and to see which benefits you may be entitled to.

Self-employed workers and high earners need to file self-assessment tax returns

Most UK taxpayers have their taxes deducted automatically from their wages, pensions or savings, and won't need to file a tax return. But tax returns are due from individuals or businesses who haven't had tax automatically deducted, or who have earned extra untaxed income.

You'll need to submit a tax return if any of the following applied to you in the 2020/2021 tax year:

  • You were self-employed and your income was more than £1,000.
  • Your income was more than £50,000, and you or your partner claimed child benefit.
  • You earned more than £2,500 from renting out property, or from other untaxed income, such as tips or commission.
  • You earned more than £100,000 in taxable income.
  • You earned £10,000 or more before tax from savings, investments, shares or dividends.
  • You earned income from abroad, or lived abroad and had a UK income.
  • You need to pay capital gains tax.
  • You received income from a trust.
  • Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016).
  • HMRC has told you that you didn't pay enough tax last year (and you haven't already paid up through your tax code or voluntary payments).
  • You filed a self-assessment tax return last year (even if you didn't owe any tax). You'll need to do this unless HMRC has already written to you to say you don't need to file one.

You'll need to declare any Covid-19 grants or payments

The 2020 to 2021 tax return covers earnings and payments during the pandemic. You'll need to declare if you received any grants or payments from the Covid-19 support schemes up to 5 April 2021 on your self assessment, as these are taxable, including:

  • The Self-Employment Income Support Scheme.
  • The Coronavirus Job Retention Scheme.
  • Other Covid-19 grants and support payments, such as self-isolation payments, local authority grants and funding for the Eat Out to Help Out scheme. 

The £500 one-off payment for working households receiving tax credits does not need to be declared in your self assessment return.

You should have registered for self-assessment by 5 October

The deadline to register for a self-assessment tax return was technically 5 October 2021 – but generally you'll be OK if you register now, as long as you file the tax return itself before the deadline.

If this is your first time filing a return, you can register by visiting the HMRC website.

HMRC will then set up your self-assessment online account and send you a letter with your unique taxpayer reference – a 10-digit code, which you'll need the first time you log in.

It's crucial you register ASAP, as it can take up to 10 working days for you to receive your reference number.

If it's your first time filing online but you already have a reference number – for example, because you've previously filed a paper return – you should be able to skip this step and just register for the online service.

Head to Gov.uk if you've lost your login details

You'll need to log into your self-assessment account with your Government Gateway ID or using Gov.uk Verify.

  • Forgotten your Government Gateway details? You can retrieve your user ID or reset your password online.
  • Forgotten your Gov.uk Verify details? You'll need to use the forgotten username or password function of the provider which has verified your identity. See Gov.uk for more.

If you're signing into your self-assessment account for the first time and have forgotten your unique taxpayer reference number, you should be able to find it on previous tax returns or on other documents from HMRC, such as payment reminders. It's also available on your HMRC online account.

If you can't find your unique reference, you can phone the self-assessment helpline on 0300 200 3310.

You've missed the deadline for filing a paper return

The deadline for filing paper returns for the 2020/21 tax year was 31 October 2021 – so you must file your return online now to avoid paying a penalty. If you were to file a paper return now you would be fined.

It's not just your return you need to file - you also need to pay your tax bill

It's not just tax returns that need to be filed by 31 January 2022. The deadline for paying any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account will also be due on 31 January 2022. Miss these payments and you'll be fined and charged interest. 

You can pay your tax bill by bank transfer, debit card or cheque. You can also pay at your bank or building society if you have a paying-in slip from HMRC. HMRC accepts money under the Faster Payments system, which allows payments to go through in two hours. However, each bank has a limit on how much you can transfer under Faster Payments. The limits range from £5,000 to £100,000. See each provider's limit.

You can no longer pay the bill using a personal credit card or at the Post Office.

Speak to HMRC urgently if you can't afford to pay the tax

If your bill is correct but you find you can't afford it contact HMRC as soon as possible as you may be able to avoid late payment penalties by coming to an arrangement to spread your payments over a period of time – see below for more on this. (Also see our Free Tax Code Calculator to ensure you're on the right tax code).

You'll need a reasonable excuse for not paying your tax on time. This is usually something unexpected or outside your control that stopped you meeting a tax obligation. For example:

  • Your partner or another close relative died shortly before the tax return or payment deadline.
  • You had an unexpected stay in hospital that prevented you from dealing with your tax affairs.
  • You had a serious or life-threatening illness.
  • Your computer or software failed just before or while you were preparing your online return.
  • Issues with HMRC's online services.
  • A fire, flood or theft prevented you from completing your tax return.

You could be hit with a £100 fine if you miss the deadline to file - plus, extra penalties for paying the tax late 

Normally, you are charged a £100 penalty if you fail to submit your return by the deadline – even if there's no tax to pay. However, this year HMRC says it will waive late penalties so long as you file online by 28 February. Miss this deadline though and the £100 fine will apply. 

Further penalties of £10 a day are then applied after three months, up to a maximum of £900. After six months, you'll get a further penalty of 5% of the tax owed or £300 (whichever is greater), which is repeated at 12 months. These penalties will apply from the new deadline of 28 February.

There are also extra penalties for paying the tax late – these are usually charged at 5% of the unpaid tax after 30 days, six months and 12 months. But this year, you will not receive a late payment penalty if you pay your tax in full, or set up a 'time to pay' arrangement, which allows you to spread out your payments with a payment plan, by 1 April. Miss this revised deadline though and the late payment penalties will come into force.

You will, however, still be charged interested at 2.75% on any unpaid taxes from 1 February, so it's still better to pay on time if possible. 

The Government provides an online tool for calculating how much you'll need to pay in penalties and interest if you miss the deadlines.

You can contact HMRC directly for more advice

The Government provides help sheets and video guidance on submitting your tax return.

You can also contact HMRC for advice directly by calling the helpline on 0300 200 3310. It's open from 8am to 8pm on weekdays, 8am to 4pm on Saturdays and 9am to 5pm on Sundays. You can also get general help from HMRC customer support on Twitter.

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