Warning to file tax return by deadline or miss out on up to £7,500 of government support
Self-employed people should always fill out self-assessment tax returns each year to declare their income to the government. HMRC is then able to use this system to collect Income Tax from individuals across the country. The deadline for self-assessment forms to be filed with the government falls on January 31 every year.
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This year, nearly one million taxpayers missed out on the deadline, meaning they were issued with an automatic £100 penalty.
However, filing your 2018/19 tax return has gained even more importance this year due to the coronavirus crisis.
The government has announced a scheme to assist the self-employed during this turbulent time known as the Self-Employment Income Support Scheme (SEISS).
The SEISS allows self-employed people to claim a taxable grant worth 80 percent of trading profits up to a maximum of £2,500, available for at least three months.
But the government has stipulated Britons must file their 2018/9 tax return, or risk being barred from support altogether.
Chancellor Rishi Sunak has therefore offered a grace period for those who missed the January 2020 tax return deadline, to allow more people to receive support.
The self-employed will now be given up to Thursday, April 23 to submit their return and pay tax owed to be eligible for the coronavirus support.
But those who miss this extended deadline have been warned they could stand to lose up to £7,500 worth of government money as a result.
However, the government has confirmed HMRC will continue to review any late returns in the usual way.
The data from the 2018/19 tax returns submitted will allow HMRC to establish who is eligible for the coronavirus report scheme.
The organisation will not take into account any changes made to submitted returns after March 26, 2020 when determining eligibility or the amount of support to be received.
HMRC has established a coronavirus helpline and a web chat service to assist those who are struggling to pay taxes due to coronavirus.
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It aims to assist people to meet the April deadline so they will be able to receive government relief.
The government scheme is not yet up and running, so those who are self-employed have been encouraged to claim Universal Credit until mid May 2020.
The ‘new style’ Employment and Support Allowance can also be claimed for those who have a disability or a health condition.
All claims can be carried out remotely through an online or phone service due to the outbreak of the virus.
HMRC will then reach out in May to those who meet the requirements, inviting them to make a claim through the government website.
Payments are expected to be made by early June 2020 to help those who are struggling with income.
The grant will be based on an individual’s average trading profit over the three tax years from 2016 to 2019.
The government has confirmed those receiving the grant can continue to work or take on other employment opportunities, including volunteer work.
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