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Self-assessment tax return 2021: why submit early?

December 2020

31st January 2021 is the deadline. HMRC are encouraging those who are submitting their self-assessment tax return to beat the January rush and to complete them as soon as possible. After all, if you submit early, you can’t be late – and late submissions mean substantial fines.

Self-assessment tax return 2021

It is now less than 2 weeks until Christmas. The festive period is, of course, precious time away from work and thinking about your self-assessment tax return, time which ought to be spent relaxing after a busy and stressful year.

It is estimated that 12 million taxpayers are expected to meet the fast-approaching deadline.

Last year, 26,500 people submitted their tax return between 11pm and midnight on 31st January, stressing and blundering through countless documents to fill in the arduous tax return form, literally last minute. As you are well aware, leaving tasks of this nature to the last minute can result in making a lot of mistakes. We have already addressed the late and incorrect submission fees which can be found here.

At a glance, you are looking at a £100 fine if you are just one day late, and an additional £10 for each day after that. It only goes up from there, and those who are carless with their application or deliberately underestimate their taxes face the heaviest fines.

Filing early may help you secure a SEISS grant

Some self-employed workers and members of a partnership will be eligible to receive the government’s self-employed income support scheme (SEISS) grant. This covers up to 80% of lost earnings, with a cap of £7,500, for the three months spanning from November 2020 to January 2021.

This is the third SEISS grant release, however there are now additional eligibility criteria: applicants must have had a new or continuing impact from coronavirus from 1 November to the end of January, which you believe will cause a significant reduction in business profits during this period.

Applications for the SEISS grants are due to close on 29 January 2021, just two days before the self-assessment tax return deadline. By filing your tax return early, you can provide any evidence of claims you make concerning the impact coronavirus is having on your trading profits, meaning you can meet the deadline and increase your business’s likelihood of receiving help. You can find out more about the SEISS here.

If you are struggling to pay your tax liabilities due to this year’s unprecedented events, the government’s Time to Pay facility may be something to consider. For any of our clients who are struggling, this is something we may be able to assist with, and can discuss tax matters with HMRC on their behalf if need be.

If you have any questions about self-assessment tax returns, or to discuss our tax return services, please do not hesitate to get in touch.

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