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    Tag: self assessment

    Winter Fuel Payments and the 2025/26 tax charge: what you need to know

    Posted on by Rebecca Campbell

    Did you receive a Winter Fuel Payment in 2025? If so, it could be fully recovered through tax if your income is above £35,000. In our latest blog, we explain what individuals need to know to avoid unexpected deductions.

    When does a Winter Fuel Payment tax charge apply?

    The charge applies if an individual’s total income for the 2025/26 tax year (before deductions such as the personal allowance) exceeds £35,000.

    Total income includes all earnings, state pension, private pensions, taxable investment income and any other income subject to tax such as property income.  Capital gains and tax-free state benefits are excluded.

    This means the full payment will be clawed back, not just the amount above the threshold. The test is applied to individual income, not household income. One person in a couple may be affected while the other is not.

    Example

    HMRC guidance explains how this works in practice:

    • One spouse has income of £22,000
    • The other spouse has income of £36,000

    Both may receive a Winter Fuel Payment, however, only the higher earner faces a tax charge. The lower earner keeps their payment in full, while the higher earner has theirs recovered through tax.

    How will HMRC collect the tax?

    Through Self Assessment

    Individuals who complete a Self Assessment tax return will see the charge applied in their 2025/26 return, due by 31 January 2027 if filed online.

    HMRC plans to pre-populate this charge on online returns, however, the responsibility for accuracy remains with the taxpayer. If the charge applies but does not appear, it must be included manually.

    Through PAYE

    Individuals who do not complete a Self Assessment return will usually see the charge collected via an adjustment to their PAYE tax code for 2026/27.

    For a typical £200 Winter Fuel Payment, this could mean around £17 per month extra tax deducted from a pension or salary.

    Some PAYE codes issued in February 2026 may not yet include the adjustment, but HMRC has confirmed that codes will be updated automatically in April 2026.

    Opting out – and opting back in

    To avoid the payment being clawed back, individuals can opt out of receiving Winter Fuel Payments, however, a separate opt-out is required each year. The Department for Work and Pensions (DWP) is expected to release an online form in April 2026.

    Individuals who opted out for 2025 but now expect their 2025/26 income to fall below £35,000 can opt back in, however, this must be done by 31 March 2026.

    Practical points to consider

    This change could lead to unexpected tax deductions, especially for individuals who do not usually deal with tax returns or PAYE adjustments.

    It is sensible to:

    • Review expected 2025/26 income
    • Consider whether the £35,000 threshold will be exceeded
    • Check PAYE tax codes when issued
    • Seek advice if you are unsure whether the charge applies or whether opting out is appropriate

    Need help?

    If you are unsure whether the Winter Fuel Payment tax charge will affect you, or whether you should opt out, get in touch. Email enquiries@pmm.co.uk, and one of our expert advisers will be happy to help.

    HMRC to introduce new penalty points system in 2026

    Posted on by Rebecca Campbell

    From 2026, HMRC is replacing the longstanding automatic fines for late tax filings with a penalty points system as part of its Making Tax Digital (MTD) reforms. The aim is to make late-filing sanctions more proportionate and fairer by distinguishing between occasional ‘slip-ups’ and persistent non-compliance.

    What’s changing

    Under the current regime, missing the 31 January Self Assessment deadline triggers an automatic £100 fine, which can escalate quickly with daily and longer-term penalties.

    Under the new system:

    • Each missed deadline earns a penalty point
    • A £200 fine is charged for each late submission once a set points threshold is reached
    • Points accumulate against each filing obligation and can expire after 24 months or reset after a period of good compliance

    This is designed to penalise repeated late filing rather than isolated errors and give taxpayers a clearer path to correct behaviour.

    Points thresholds

    The number of points required before a fine is charged depends on how often you file:

    • Annual returns: penalty at 2 points
    • Quarterly updates (MTD): penalty at 4 points
    • Monthly returns: penalty at 5 points

    For example, missing two annual obligations within two years would trigger a £200 penalty under the new regime.

    Rollout timeline

    • Pilot phase (early 2026): HMRC is already trialling the points system with a group of taxpayers as part of MTD voluntary testing.
    • First rollout from 6 April 2026: Applies initially to sole traders and landlords with income over £50,000 who must join MTD for Income Tax.
    • Full rollout from 6 April 2027:  The system extends to all self-assessment taxpayers

    Importantly, HMRC will provide a soft landing in the first year: penalty points will not be charged for late quarterly updates for the initial year of MTD for Income Tax implementation, giving taxpayers time to adjust.

    What this means for taxpayers

    If you are self-employed, a landlord, or otherwise subject to Self-Assessment:

    • One occasional late submission won’t necessarily hit you with immediate fines
    • Repeated late filings still lead to penalties – and a £200 fine will be incurred for each late submission once the points thresholds are reached
    • Good digital record-keeping and calendar discipline will be even more important

    Filing regularly using MTD-compatible software and meeting deadlines remains the most effective way to avoid penalty points altogether.

    Stay prepared

    From 2026, late filing penalties will be based on accumulated points rather than automatic fines. While this makes the system fairer for occasional slip-ups, repeated missed deadlines can still trigger financial penalties.

    Now is the time to review your filing processes, ensure your records are MTD-compliant, and put a plan in place to avoid points building up.

    Our team can help. Whether it’s assessing your current compliance, setting up effective digital record-keeping, or providing ongoing support, we can guide you through the changes and help you stay penalty-free. Get in touch to arrange a 1-1 discussion by emailing enquiries@pmm.co.uk.

     

    1 million people missed the Self Assessment tax return deadline

    Posted on by Rebecca Campbell

    According to HMRC, 1 million taxpayers missed the 31 January 2026 deadline for submitting their 2024/25 income tax Self Assessment.

    If you’re one of those who has yet to submit your tax return, don’t delay! We recommend submitting your Self Assessment as soon as possible. Here’s what you need to know:

    Penalties for late filing

    • Immediate penalty: £100 fixed penalty, even if no tax is owed
    • 3 months late: £10 per day (up to a maximum of £900)
    • 6 months late: Additional penalty of 5% of tax due or £300 (whichever is greater)
    • 12 months late: Another 5% penalty on tax still owed

    If you can’t pay your tax bill

    If you’re unable to pay your tax bill, engaging with HMRC and a trusted tax adviser as early as possible is crucial – early engagement gives you the best chance of mitigating any financial penalties. Options such as ‘time to pay’ arrangements may help you avoid additional penalties, although late payment interest will still accrue.

    Take action now

    If you’ve yet to submit your 2024/25 tax return and need help or advice to minimise penalties, please speak with your usual PM+M adviser or email us at enquiries@pmm.co.uk.

     

    Self Assessment – 100 days to go until tax deadline

    Posted on by Georgia Flatley

    With 100 days to go until the deadline for online returns (31 January 2026) there’s no time like the present to complete your tax return.

    Sending your return early comes with the benefit of knowing what you owe so you can budget to make the payment by 31‌ January 2026, and if you need to look at the range of payment options available, filing early allows you to enter a payment plan in good time. Any repayments which may be due can also be claimed early.

    UNSURE IF YOU NEED TO FILE A SELF ASSESSMENT TAX RETURN?

    You must file a self-assessment return if, in the last tax year, you were:

    • self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
    • a partner in a business partnership
    • you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
    • you had to pay the High Income Child Benefit Charge and do not pay it through PAYE

    You may also need to send a tax return if you have any untaxed income, such as:

    • money from renting out a property
    • tips and commission
    • income from savings, investments, and dividends
    • foreign income

    If you are still unsure if you need to file a return, you can use the HM Revenue and Customs check service by clicking here.

    GET IN TOUCH

    For further advice or help with completing your 2024/25 self-assessment tax return, please get in touch with a member of the tax team by emailing enquiries@pmm.co.uk.

    Five tips to get ahead with your 2024/25 Self Assessment tax return

    Posted on by Rebecca Campbell

    The deadline for filing your 2024/25 Self Assessment tax return may feel far away, but starting early can save you time, stress, and potentially money. At PM+M, we know from experience that a proactive approach makes the process much smoother and more efficient.

    Here are our five top tips to help you get ahead:

    1. Know your key deadlines

    The 2024/25 tax year runs from 6 April 2024 to 5 April 2025. For this period, the following dates apply:

    • 5 October 2025 – Register with HMRC if this is your first return
    • 31 October 2025 – Deadline for paper tax returns
    • 30 December 2025 – Deadline for online filing if you want HMRC to collect any tax you owe (under £3,000) automatically through your tax code for the 2026–2027 tax year. You must already be paying tax through PAYE
    • 31 January 2026 – Deadline for online tax returns and payment of any tax due

    Mark these dates in your diary early to avoid late filing penalties and interest charges.

    1. Get organised early

    Don’t wait until January to gather your paperwork. HMRC requires details of your income, pensions, dividends, rental income, expenses, and any other earnings for the year ending 5 April 2025. Keeping everything together, whether digitally or in a dedicated folder, will make completing your return quicker and easier.

    Make sure you keep track of:

    • Income records: Payslips, self-employment accounts, dividends, and ‘side hustle’ earnings
    • Expenses: Office supplies, mileage, and other allowable deductions
    • Financial records: Bank interest, pensions, investment statements, and charitable donations
    1. Track your expenses as you go

    If you’re self-employed or receive rental income, recording expenses in real time prevents the January scramble through old bank statements. Tools such as accounting apps, spreadsheets, or cloud-based software can help you stay organised – and ensure you don’t miss out on valuable deductions.

    1. Make the most of allowances and reliefs

    Understanding the reliefs and allowances available to you can reduce your tax bill. For example:

    • Pension contributions
    • Gift Aid donations
    • The personal savings allowance
    • Business-related costs such as office and travel expenses, professional fees, and subscriptions
    • Landlord expenses including maintenance and letting agent fees

    Taking advantage of these can significantly cut the amount of tax you pay.

    1. Plan for payments on account

    If your tax bill is over £1,000, HMRC may ask you to make “payments on account” towards the following year. These fall due on 31 January 2026 and 31 July 2026. Factoring this into your cash flow early will help you budget effectively and avoid unwelcome surprises.

    Start early, stress less

    The earlier you begin preparing your Self Assessment, the more time you’ll have to understand your position, make use of available reliefs, and spread the cost of any payments due. By starting now, you’ll avoid last-minute pressure and gain greater control over your tax planning.

    At PM+M, we’re here to support you throughout the process and beyond. If you’d like to discuss your 2024/25 Self Assessment or wider tax planning, please get in touch with our team by emailing enquiries@pmm.co.uk.

    Nearly 3 million taxpayers to join Making Tax Digital – are you ready?

    Posted on by Rebecca Campbell

    HMRC’s latest figures reveal that nearly 3 million individuals with self-employment or property income will be required to comply with Making Tax Digital for Income Tax (MTD for ITSA) between April 2026 and April 2028.

    At PM+M, we understand that MTD can feel daunting for businesses and landlords alike. With deadlines approaching, now is the time to prepare — and we’re here to make the transition seamless.

    The phased rollout of MTD

    HMRC is introducing MTD gradually, based on income levels:

    • From April 2026 – Anyone with self-employment or property income above £50,000 must keep digital records and submit quarterly updates. This affects around 864,000 taxpayers.
    • From April 2027 – Those with income between £30,000 and £50,000 join the scheme, bringing in an additional 1,077,000 taxpayers.
    • From April 2028 – The final group, with income between £20,000 and £30,000, will be included, adding 975,000 more taxpayers.

    By the end of the rollout, around 2.9 million individuals will be within the scope of MTD ITSA.

    Who will be affected?

    HMRC data shows that large numbers of people will be drawn into MTD as thresholds lower:

    • More than 600,000 self-employed individuals and 260,000 landlords have income between £20,000 and £30,000 – they will join in 2028
    • Around 800,000 self-employed individuals and 182,000 landlords fall within the £30,000 to £50,000 band – they will be required to comply from 2027
    • Over 600,000 self-employed individuals, 118,000 landlords, and 141,000 people with mixed income already earn above £50,000 – meaning they are first in line from 2026

    This illustrates the scale of the change: it’s not just high earners, but also smaller businesses and landlords who will be affected.

    The digital readiness gap

    One of the biggest challenges is that many taxpayers are still unprepared for digital tax reporting:

    • 65% of those in scope currently use an authorised agent (such as an accountant)
    • Among taxpayers without an agent, 83% do not use software to submit returns
    • By contrast, most represented clients already use software – meaning those without professional support are the least prepared

    Why you should act now

    With nearly three million people moving to MTD, waiting until the deadline could put you at risk of non-compliance, unnecessary penalties, or administrative headaches. Transitioning early gives you time to:

    • Get comfortable with digital record-keeping
    • Adopt MTD-compliant software
    • Ensure you’re submitting updates correctly and on time

    How PM+M can help

    We provide tailored solutions to make your MTD journey stress-free:

    • Software setup + training – we’ll recommend and implement the right digital tools for your business
    • Quarterly submissions – we can manage updates directly with HMRC, keeping you compliant
    • Ongoing support – from troubleshooting software to tax planning, our expert team is here year-round

    Whether you’re a sole trader, landlord, or running a small business, we’ll ensure you stay ahead of the curve.

    Join us at our MTD drop-in days

    To help you prepare, we’re hosting two free drop-in days where you can speak directly with one of our MTD specialists about any queries you may have – no appointment needed.

    Thursday 25 September – Blackburn office (New Century House, Greenbank Technology Park, Challenge Way, Blackburn, BB1 5QB)

    Tuesday 30 September – Bury office (First Floor, Sandringham House, Hollins Brook Park, Pilsworth Road, Bury, BL9 8RN)

    Both sessions run from 10am to 4pm. Throughout the day, our team will be on hand to answer your questions on how MTD for ITSA will affect you, what digital records you’ll need to keep, the software options available, and how to make the transition to cloud accounting as smooth as possible.

    These events are open to everyone – whether you’re a sole trader, landlord, or part of a finance team – so feel free to drop in for a brew and a chat.

    Don’t leave MTD until the last minute

    The shift to digital tax reporting is one of the biggest changes in decades. With phased deadlines already set, the sooner you act, the smoother the process will be.

    Contact PM+M’s MTD experts today to discuss how we can help you transition to Making Tax Digital with confidence. Email enquiries@pmm.co.uk for more information.

     

    Nearly 300,000 taxpayers to be exempt from Self Assessment filing requirement

    Posted on by Rebecca Campbell

    HMRC is set to raise the Self Assessment tax return threshold from £1,000 to £3,000, a change expected to exempt nearly 300,000 taxpayers from filing annual returns. This policy shift aligns with the government’s broader strategy to modernise tax reporting and streamline HMRC operations, making it easier for individuals with extra income, or a ‘side hustle,’ to comply with tax regulations.

    However, if your earnings exceed the new threshold by even £1, you will still need to file a return. While the new rules remove the requirement to submit a tax return for those earning under £3,000, tax must still be paid on any income exceeding £1,000. HMRC plans to introduce a simplified online service to facilitate these payments.

    Understanding the threshold increase

    HMRC recently announced the proposed change, outlining that the updated threshold will take effect within this Parliament, meaning it will be in place by 2029. The aim is to reduce the administrative burden on those earning income from activities such as online sales, dog walking, or content creation.

    It is estimated that around 90,000 taxpayers will have no tax liability under the new threshold, while others will be able to manage their tax payments via a newly introduced online platform. This reform also acknowledges the growing number of individuals with multiple income streams, including online marketplace sellers whose earnings data has been shared directly with HMRC since 2024. By simplifying tax payments through digital services, the government aims to better support small traders and self-employed individuals while promoting entrepreneurship.

    Get in touch

    If you have any questions about how HMRC’s proposed changes may affect you, our expert tax team is here to help. Get in touch by emailing enquiries@pmm.co.uk.

     

    Self Assessment – less than 100 days to go until tax deadline

    Posted on by Rebecca Campbell

    With less than 100 days to go until the deadline for online returns (31 January 2024) there’s no time like the present to complete your tax return.

    Sending your return early comes with the benefit of knowing what you owe so you can budget to make the payment by 31‌ January 2024, and if you need to look at the range of payment options available, filing early allows you to enter a payment plan in good time. Any repayments which may be due can also be claimed early.

    UNSURE IF YOU NEED TO FILE A SELF ASSESSMENT TAX RETURN?

    You must file a self-assessment return if, in the last tax year, you were:

    • self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
    • a partner in a business partnership
    • you had a total taxable income of more than £100,000
    • you had to pay the High Income Child Benefit Charge

    You may also need to send a tax return if you have any untaxed income, such as:

    If you are still unsure if you need to file a return, you can use the HM Revenue and customs check service by clicking here.

    GET IN TOUCH

    For further advice or help with completing your 2022/23 self-assessment tax return, please get in touch with a member of the tax team by emailing enquiries@pmm.co.uk.

     

    HMRC to reform Self Assessment penalty system

    Posted on by Rebecca Campbell

    From 2026, the current standard £100 fine for late filing of Self Assessment tax returns is due to be changed to a points-based system for self-employed individuals and landlords with a turnover above £50,000.

    HMRC have confirmed that the penalty system will be reformed in order to curb the abuse of the Self Assessment system and support taxpayers who genuinely make an occasional mistake.

    The proposed penalty reforms for paying tax late will be based on the length of time the tax is outstanding, meaning the earlier the overdue payment is made, the lower the penalty charge will be.

    The points-based system will be beneficial for those who only occasionally miss deadlines. For example, if an individual misses a self assessment deadline, they will initially be given one point, with a financial penalty only being charged once a set number of points has been reached. This approach recognises that taxpayers who infrequently miss deadlines should be encouraged to comply with filing obligations, rather than immediately being charged a penalty. Instead, the new penalty regime will penalise the minority who persistently miss filing and payment deadlines.

    Although the reforms already apply for VAT, following the government decision in December 2022 to give businesses more time to prepare for Making Tax Digital (MTD) for Income Tax, the changes are now due to come in from April 2026.

    Get in touch

    If you would like to discuss the Self Assessment penalty system changes in more detail, please speak to your usual PM+M adviser or email us at enquiries@pmm.co.uk.

    600,000 people miss Self Assessment tax return deadline

    Posted on by Rebecca Campbell

    According to HMRC, 600,000 taxpayers missed the submission deadline for 2021/22 income tax Self Assessment on 31 January.

    If you are one those who is yet to submit their tax return, don’t delay! We recommend submitting your income tax Self Assessment as soon as possible. Although you will still incur the initial £100 fixed penalty, if you delay until the end of February, an automatic 5% penalty will be applied after 30 days (effectively by midnight on 2 March 2023) on any outstanding tax which remains unpaid. Additional 5% penalties can be applied on any tax which is still owed after 6 months and again after 12 months.

    Latest statistics from HMRC show that in the period from April 2022 to December 2022, penalty revenues of £529 million were raised across all taxes and duties. A 27% increase from the same period a year prior, and a 72% increase in penalty revenues from the same period two years previous.

    The ongoing cost of living crisis and rising interest rates to tackle inflation mean that HMRC may see penalty revenues grow even further over the coming months, with late payment interest due to rise from 6% to 6.5% on 21 February 2023.

    If you are unable to pay your tax bill, engaging with HMRC and a trusted tax adviser as early as possible is beneficial and offers the best chance of mitigating financial penalties.  There are options available for taxpayers to explore including ‘time to pay’ arrangements to avoid accruing additional penalties, however, late payment interest will still be charged.

    Get in touch

    If you haven’t submitted your tax return for 2021/22, and need help or advice to avoid incurring further penalties, please speak to your usual PM+M adviser or get in touch by emailing enquiries@pmm.co.uk.

    5.7 million people still to file their tax return – have you filed yours?

    Posted on by Rebecca Campbell

    HMRC have recently reported that of 12 million taxpayers who have to file a tax return for the 2021/22 tax year, just under half still need to do so before the 31 January deadline.

    Now the festive period is over, and we begin a new year – time is running out to meet the deadline, as unlike previous years, HMRC is not likely to waive late-filing penalties, and the late payment interest is set to rise too.

    Your annual Self Assessment tax return can seem daunting, especially if it is your first one, however, by reading our basic tips and pointers below to help you prepare the return and avoid mistakes, it can be a simple process.

    WHAT IS SELF ASSESSMENT?

    Self Assessment is the process of informing HMRC about your taxable income and gains for a tax year by completing a tax return. Tax is usually deducted automatically from wages, pensions, and some savings income, however, people and businesses with other income (including pension payments, property letting and Capital Gains Tax on the sale of assets like shares or a second home) must complete a Self Assessment tax return.

    DO I NEED TO COMPLETE A SELF ASSESSMENT TAX RETURN?

    You must submit a tax return if, in the last tax year (6 April 2021 to 5 April 2022), you were:

    • Self employed as a ‘sole trader’ and earned more than £1,000 (before deducting anything on which you can claim tax relief)
    • A partner in a business partnership
    • You earned £100,000 or more

    Usually, you will not need to submit a return if your only income is from your wages or pension. However, you may need to complete one if you have other untaxed income such as:

    • Some COVID-19 grant or support payments
    • Property rental income
    • Tips and commission
    • Income from savings, investments and dividends
    • Foreign income

    If you are still not sure, click here to visit the Gov.uk website and answer a few questions to check if you need to submit a Self Assessment tax return.

    SELF ASSESSMENT TAX RETURN DEADLINES

    • Paper tax returns should have been submitted by midnight 31 October 2022
    • Online tax returns are due by midnight 31 January 2022
    • Pay the tax you owe by midnight 31 January 2022

    WHAT INFORMATION DO I NEED TO COMPLETE MY TAX RETURN?

    • Ten-digit Unique Taxpayer Reference (UTR) – this will have been sent to you when you registered for Self Assessment  – if you haven’t got one, you need to register ASAP online by clicking here
    • National insurance number
    • Details of self-employment income and expenses
    • Details of property income and expenses
    • Employment and pensions income information, including forms P60, P11D and P45 from any jobs you have had
    • Interest certificates from banks/building societies
    • Details of pension and/or charity Gift Aid contributions which may be eligible for tax relief
    • Details of dividends and other income
    • Details of any chargeable capital gains made in the year

    HMRC will calculate what you owe in tax based on the information which you report – remember, you must pay your bill by 31 January 2022.

    GET IN TOUCH

    Hopefully you are already on with or have completed your tax return for 2021/22.  If you haven’t, or if you aren’t sure whether you need to submit a tax return, get in touch straight away to avoid missing the deadline and incurring penalties.  Please speak to you usual PM+M adviser or get in touch by emailing enquiries@pmm.co.uk.

     

    Self-assessment: less than 100 days to go until tax deadline

    Posted on by Rebecca Campbell

    With less than 100 days to go until the deadline for online returns (31 January 2023), and 5 days until the deadline for paper returns (31 October 2022), there’s no time like the present to complete your tax return.

    Sending your return early comes with the benefit of knowing what you owe so you can budget to make the payment by 31‌ January 2023, and if you need to look at the range of payment options available, filing early allows you to enter a payment plan in good time. Any repayments which may be due can also be claimed early.

    Unsure if you need to file a self-assessment tax return?

    You must file a self-assessment return if, in the last tax year, you were:

    • self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
    • a partner in a business partnership

    You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:

    If you are still unsure if you need to file a return, you can use the HM Revenue and customs check service by clicking here.

    Get in touch

    For further advice or help with completing your 2021/22 self-assessment tax return, please contact Julie Walsh by using the button below.

    Taxpayers face further delays for refunds from HMRC

    Posted on by Rebecca Campbell

    HMRC have recently launched a dashboard to inform taxpayers about the time it is taking to deal with enquiries and settle tax repayments, with delays of up to eleven months in some instances.

    The dashboard, which will be updated weekly, gives accurate and clear information of HMRC’s service performance, and whether they are achieving response time targets, and if not, how long the delay is expected to be.

    Refunds from self-assessment tax returns are held in a backlog, with HMRC currently handling submissions from 5 May. This means that claims are taking 56 days to handle, compared with the usual 15 working day turnaround.

    Marriage allowance claims are also affected, taking nearly three times the usual turnaround time.

    R40 income taxed at source, whereby agents are trying to claim a refund of income tax deducted from savings and investments, is one of the worst affected, suffering delays of nearly a year, with HMRC currently handling requests dating back to August 2021.

    Delays are expected to be resolved by October 2022 at the earliest, according to HMRC, however, this is an estimate and subject to change.

    Access the HMRC dashboard to check current service levels for post and online requests.

    Get in touch

    If you are currently awaiting a tax refund from HMRC which you would like to discuss further, please contact your usual PM+M representative or get in touch by emailing enquiries@pmm.co.uk.

    HMRC announce extra time for Self Assessment taxpayers

    Posted on by Rebecca Campbell

    HMRC is waiving late filing and late payment penalties for Self Assessment taxpayers for one month – giving them extra time, if they need it, to complete their 2020/21 tax return and pay any tax due. HMRC state that they recognise the pressure faced this year by Self Assessment taxpayers, and their agents, to meet their obligations due to COVID-19.

    However, HMRC urge taxpayers to file and pay on time if they are able to, as the department reveals that, of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.

    The deadline to file and pay remains 31 January 2022.

    The penalty waivers will mean that:

    • Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February
    • Anyone who cannot pay their Self Assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April

    Some points to note:

    • Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible
    • Returns filed in February will be classed as late and HMRC will have an extended period to enquire into them
    • The existing Time to Pay service allows any individual or business who needs it the option to spread their tax payments over time. Self Assessment taxpayers with up to £30,000 of tax debt are able to do this online once they have filed their return
    • The 2020/21 tax return covers earnings and payments during the pandemic. Taxpayers must declare any grants or payments from the COVID-19 support schemes up to 5 April 2021 on their Self Assessment, as these are taxable, including:
      • Self-Employment Income Support Scheme (SEISS)
      • Coronavirus Job Retention Scheme (CJRS)
      • Other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme
      • The £500 one-off payment for working households receiving tax credits should not be reported in Self Assessment

    We urge you, where possible, to still submit your return by the 31 January deadline, only using this penalty waiver if you really must and where there are reasonable grounds for you to be able to say that the return could not be submitted on time.

    If you would like to discuss your specific situation in more detail, or need some help with your tax return, contact us as soon as possible by speaking to your PM+M adviser or by emailing enquiries@pmm.co.uk.

     

     

    Have you completed your Self Assessment tax return?

    Posted on by Rebecca Campbell

    With the festive period behind us, and as we begin a new year, it means only one thing – the 31 January personal tax return deadline is rapidly approaching.

    Your annual Self Assessment tax return can seem daunting, especially if it is your first one, however, by reading our basic tips and pointers below to help you prepare the return and avoid mistakes, it can be a simple process.

    What is Self Assessment?

    Self Assessment is the process of informing HMRC about your taxable income and gains for a tax year by completing a tax return. Tax is usually deducted automatically from wages, pensions, and some savings income, however, people and businesses with other income (including Covid-19 grants and support payments) must complete a Self Assessment tax return.

    Do I need to complete a Self Assessment tax return?

    You must submit a tax return if, in the last tax year (6 April 2020 to 5 April 2021), you were:

    • Self employed as a ‘sole trader’ and earned more than £1,000 (before deducting anything on which you can claim tax relief)
    • A partner in a business partnership

    Usually, you will not need to submit a return if your only income is from your wages or pension. However, you may need to complete one if you have other untaxed income such as:

    • Some COVID-19 grant or support payments
    • Property rental income
    • Tips and commission
    • Income from savings, investments and dividends
    • Foreign income

    If you are still not sure, click here to visit the Gov.uk website and answer a few questions to check if you need to submit a Self Assessment tax return.

    Self Assessment tax return deadlines

    • Paper tax returns should have been submitted by midnight 31 October 2021
    • Online tax returns are due by midnight 31 January 2022
    • Pay the tax you owe by midnight 31 January 2022

    What information do I need to complete my tax return?

    • Ten-digit Unique Taxpayer Reference (UTR) – this will have been sent to you when you registered for Self Assessment or when you set up a limited company
    • National insurance number
    • Details of self-employment income and expenses
    • Details of property income and expenses
    • Employment and pensions income information, including forms P60, P11D and P45 from any jobs you have had
    • Interest certificates from banks/building societies
    • Details of pension and/or charity contributions which may be eligible for tax relief
    • Details of dividends and other income
    • Details of any chargeable capital gains made in the year

    HMRC will calculate what you owe in tax based on the information which you report – remember, you must pay your bill by 31 January 2022.

    Get in touch

    Hopefully you are already on with or have completed your tax return for 2020/21.  If you haven’t, or if you aren’t sure whether you need to submit a tax return, get in touch straight away to avoid missing the deadline and incurring penalties.  Please speak to you usual PM+M adviser or get in touch by emailing enquiries@pmm.co.uk.