SELF ASSESSMENT TAXPAYERS MUST DECLARE COVID GRANTS ON TAX RETURNS

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HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return.

According to HMRC, more than 2.7 million customers claimed at least one Self-employment Income Support Scheme (SEISS) payment up to 5 April 2021.

The tax authority says these grants are taxable and customers should declare them on their 2020/21 tax return before the deadline on 31 January 2022.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘We want to help customers get their tax returns right, first time. We have videos, guidance and helpsheets available online to support you with your self assessment.’

The SEISS is not the only COVID-19 support scheme that customers should declare on their tax return. Information on which support payments need to be reported to HMRC and any that do not is available on GOV.UK.

Internet link: GOV.UK

HMRC WAIVES SELF ASSESSMENT PENALTIES FOR ONE MONTH TO EASE COVID-19 PRESSURES

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HMRC is waiving late filing and late payment penalties for self assessment taxpayers for one month.

The measure will give those taxpayers affected by the coronavirus (COVID-19) extra time, if they need it, to complete their 2020/21 tax return and pay any tax due.

HMRC is still encouraging taxpayers to file and pay on time if they can. The tax authority also revealed 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; and
  • 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.

However, interest will be payable from 1 February.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: ‘We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19. Our decision to waive penalties for one month for self assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.’

Internet link: HMRC press release

HMRC ISSUES WARNING ON SELF ASSESSMENT SCAMS

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HMRC has warned taxpayers completing their 2020/21 tax returns to ‘be on their guard’ and stay vigilant in regard to tax-related scams.

Nearly 800,000 tax scams were reported in the last year, HMRC revealed. It said that fraudsters use self assessment to attempt to steal money or personal information from taxpayers.

In the last year, HMRC received almost 360,000 bogus tax rebate referrals. HMRC will send more than four million emails and SMS messages this week to self assessment taxpayers, prompting them to think about how they intend to pay their tax bill.

It is warning taxpayers ‘not to be taken in’ by malicious emails, phone calls or texts, and to not mistake them for genuine HMRC communications.

Myrtle Lloyd, Director General for Customer Services at HMRC, said:

‘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.’

The self assessment deadline is 31 January 2022.

Internet link: HMRC press release