Coronavirus (COVID-19) tax return update
The coronavirus pandemic has caused the government to introduce a range of measures to support the self-employed and small businesses that fall into financial hardship as a result of the crisis.
If you have a 'payment on account' to make in July 2020, you can defer this until January 2021. You can also defer VAT payments that are due.
Anyone who missed the January 2020 self-assessment deadline has also been given a four-week extension to file their tax return, starting 26 March.
Which? has explained what changes will affect the self-employed in the following advice guides:
- Changes to IR35 rules
- Self-employment income support scheme explained
- Coronavirus advice for small businesses and the self-employed
- Income tax, National Insurance and VAT deferral plans explained
- How to apply for Universal Credit
And you can follow more of the latest updates and advice related to the COVID-19 outbreak over on our dedicated Which? coronavirus information hub.
Important deadlines for 2020
31 January 2020: online tax returns and first payment on account due
This was the final deadline for online tax returns for the 2018-19 tax year. HMRC must have received your tax return by midnight.
Usually, the only time this deadline may differ is if you received a notice to make an online tax return from HMRC after 31 October 2019, in which case you have three months from the date of issue to file.
However, anyone who missed the January 2020 self-assessment deadline has also been given a four-week extension to file their tax return, starting 26 March to be eligible for the coronavirus self-employed income support scheme.
The deadline to pay your tax bill is also 31 January, and if you're self-employed it's the day you'll have to make your first payment on account for the 2019-20 tax year, and a balancing payment if tax is still owed from your 2018-19 income.
6 April: first day of the new 2020-21 tax year
Depending on what has been agreed in the Budget (scheduled for Wednesday 11 March), new tax rates and allowances for 2020-21 will come into force from today, so make sure you know if anything has changed.
If you have all of the information you need, you could file your 2019-20 tax return from this date.
31 July 2020: second payment on account due
Self-employed workers who pay tax through payment on account will have to make their second payment by midnight on 31 July - although, for 2020, this payment can be deferred until 31 January 2021 thanks to emergency coronavirus measures.
The amount you pay is an estimate based on your earnings in 2018-19. If you still owe tax (for example, if you earned more than you did in 2017-18), a further 'balancing payment' will be due on 31 January 2021.
This is also when you'll have to make your first payment to cover the 2020-21 tax year.
5 October 2020: register for self-assessment
If you've never submitted a self-assessment tax return before, you must register by 5 October 2020 in order to submit for the 2019-20 tax year.
This will allow you to get your 'Unique Taxpayer Reference' (UTR) number and activate code in time which you need to file your first return.
31 October 2020: paper tax returns due
This is the deadline for filing a paper tax return, However, if you receive a notice from HMRC that you must file a tax return after 31 July 2020, you'll need to send back the completed form within three months of the date issued on the notice.
If you miss the deadline for filing your paper tax return, don't be tempted to try and file it late. You'll still have time to complete an online tax return instead - as these aren't due until 31 January. But don't submit both.
30 December 2020: opt into PAYE
If you file your tax return online and also have earnings taxed under PAYE, you can opt to have overdue tax collected via your tax code throughout the following year.
However, to be eligible your tax bill must be less than £3,000 and you must file your online return by this date. The advantage of this is that any tax payable would be paid over 12 months from April 2021, rather than a single lump sum by 31 January 2021.
Fines for late tax returns
It's important to be aware that filing your tax return late, or failing to pay the tax you owe on time, will probably mean you'll face extra penalty fees and interest charges.
We've outlined the kinds of charges you could face for missing the tax return deadline below.
If you're late paying the tax you owe, you could face a host of additional fees. Find out more in our guide on late tax returns and penalties for mistakes.
How to submit your 2019-20 tax return
If you've never submitted a tax return before, you'll need to register with HMRC. You can do this online.
Once you've done that, you can choose from two ways to submit your tax return - by filling out the paper tax return and posting it to HMRC, or doing it online on the HMRC website.
Doing an online tax return has numerous advantages, which you can read about in our online tax returns guide.
Alternatively, you can use the Which? tax calculator - it's easy to use, jargon-free and offers personalised tax tips. Plus, you can submit the form directly to HMRC. Our video below explains how easy it is to use.
