Depending on how businesses and self-employed individuals prepare their accounts, there could be unexpectedly large tax bills for those that have received small business or retail, hospitality and leisure grants during the pandemic as early as this tax year.
To support the self-employed during COVID, the government announced its SEISS scheme, providing grants matching employees on furlough. The first payout started in May, and the government has announced another payout will be available in August 2020, again to match the extension of furlough to October 2020.
Under the self-assessment system, a taxpayer is required to make payments on account – advance payments towards the eventual tax and National Insurance liability – where the previous year’s self-assessment bill was £1,000 or more, unless more than 80% of the tax liability is deducted at source
Based on recent years HMRC will potentially issue at least 1 million late filing penalties. It is important to be ahead of the game in terms of advising clients who have failed to meet the filing obligation and to be able to address disputes with HMRC.
Got that nagging feeling you’ve forgotten something important? It might just be your 2017/18 tax return - with the deadline for Self Assessment looming on the 31st January 2019.
As the self-assessment deadline looms, it is not only necessary to consider what might be owing for 2017/18, but also whether any payments on account towards the 2017/18 liability need to be made.