Millions of self-employed people are still yet to file their self-assessment despite the deadline fast approaching
With the 31 January deadline just days away, the tax watchdog has said that just 7.6 million people out of more than 12.2 million have submitted their annual self-assessment for the tax year 2020/21.
HMRC is urging the four million self-employed workers, including freelancers and contractors, who have not yet completed their self-assessment tax return to do so as soon as possible and either pay any outstanding liabilities or set up a payment plan.
Interest will be charged to all outstanding balances from 1 February, HMRC has warned.
Late filing penalty waived for one month
However, the tax office announced earlier this month that it will waive the late penalties for a month for those struggling to file ahead of the January deadline.
This is the second year HMRC has waived the £100 penalty for filing late due to Covid-19.
The changes mean that anyone who cannot file their self-assessment by 31st January will not receive a late filing penalty if they file by 28 February.
Omicron putting ‘added pressure’ on contractors
And anyone who cannot pay their tax liabilities by the January deadline will not be fined as long as they pay their tax in full or set up a payment plan by 1 April.
Mike Butchart, managing director at QAccounting, commented: “The omicron variant has put added pressure on freelancers, contractors and the self-employed.
“And while the move to waive late penalties will offer much-needed breathing space for millions and help ease the financial burden to a degree, independent workers still need to be proactive, given that interest will be charged on outstanding payments from 1 February.
“With this in mind, all self-employed workers should ensure that their tax return is submitted as soon as possible and is accurate, particularly given that HMRC will be watching closely.”
What does this mean for the self-employed?
This news is a reminder to those who are yet to complete their self-assessment tax return, to prioritise this. For more information and to have a trusted accountant organise your self-assessment tax return from as little as £99 + VAT, please click here.