As the year comes to a close, many people, including our clients are preparing for the upcoming self-assessment tax returns requiring filing in 2022.
Since the very first day of the tax year (6th April) more than 63,500 people have filed their tax returns to the HMRC.
With the deadline (January 31st 2022) coming up swiftly, here’s a little breakdown of the basics around self-assessment tax returns to allow you to pay on time and even before the deadline.
What are Self-assessment Tax Returns?
This system is used by HMRC as a way to collect income tax.
Time To Pay Online Service
While many may feel this upcoming task to be heavy, especially after Christmas, there is an option that can help relieve this.
As of last year, you can now spread out payments into monthly instalments under the Time To Pay service.
Many customers found this alternative as a welcome introduction, and if you, like many others, would like to use this service, below is a brief summary of it.
What Does It Mean?
Customers can use a monthly instalment plan for up to 12 months to pay:
Their first payment on account bill for this current tax year, deferred payment on account bill from July 2020, any outstanding tax owed for 2020 to 2021.h . b.
If you require longer than 12 months to settle any of these, please contact HMRC.
Who Can Use Time To Pay?
If you would like to apply for this scheme then you must meet the requirements declared by HMRC. It includes the following:
- No outstanding tax returns
- Other tax debts
- Other HMRC payment plans set up
- The debt must be between £32 and £30,000
- The payment plan must be set up no later than 60 days after the due date of a debt
COVID Support Schemes
This year, if you have received any payments or grants from support schemes you will have to declare you have done.
These include; Self-Employment Income Support Scheme, Self-isolation payments, Eat Out to Help Out scheme, Local authority grants, Coronavirus Job Retention Scheme.
What Documents are Needed?
In order to fill your self-assessment tax return form in correctly, you must keep records. These may be bank statements or receipts and can be digital or printed.
A Little Warning
Recent reports state an influx in potential scams using the upcoming self assessment deadline as a way to take advantage of pressured people.
Approximately 800,000 tax-related scams have been reported in the past year alone.
As stated by Myrtle Lloyd, the General Director for Customer Services for HMRC;
‘Scams come in many forms. Some threaten immediate arrest for tax evasion, others offer a tax rebate. Contacts like these should set alarm bells ringing, so if you are in any doubt whether the email, phone call or text is genuine, you can check the ‘HMRC scams’ advice on GOV.UK and find out how to report them to us.’
Make sure you keep an eye out and always double-check what information/documents you are sending.
Find Out More
If you require more than 12 months to pay or have tax owing over £30,000, you may still be eligible for Time to Pay by calling the Self Assessment Payment Helpline on 0300 200 3822.
Again, be aware of scam calls,texts or emails!