Millions warned they face big tax bills and hundreds of pounds in fines over Covid support payment – how to avoid it | The Sun

Millions warned they face big tax bills and hundreds of pounds in fines over Covid support payment – how to avoid it | The Sun


MILLIONS of self-assessment tax customers are being urged to declare any Covid-related support payments ASAP as the longer you leave it, the higher fine you'll pay.

Claimants have until 31 January 2023 to submit their tax returns online and should urgently amend their forms if they haven't declared any Covid-19 payments.

HM Revenue & Customs (HMRC) has warned that 2.9 million people claimed at least one Self-Employed Income Support Scheme (SEISS) payment, one of the Covid-19 support payouts, up to 5 April 2022. 

These grants are taxable and should be declared on tax returns for the 2021 to 2022 tax year before the deadline on 31 January 2023.

HMRC is therefore urging people to fill in their self assessment tax returns forms AND include any Covid-related payments.

If they haven't then they should amend their forms immediately to avoid being charged.

Who does this affect?

If you are self-employed, in a partnership or are a business and received one of the following payments for this tax year, then you’ll need to declare it on your online self-assessment tax return form.

The deadline to submit a paper return has now passed. 

Most read in Money


Emergency plans for SEVEN-DAY blackouts 'war gamed' by Government


Disney's heartwarming Christmas ad highlights importance of being together


Martin Lewis shows how to get £230 M&S beauty advent calendar for JUST £40


Heinz bringing back 'iconic' 1990s childhood favourite

  • The Self-Employment Income Support Scheme (SEISS). The application and payment windows during the 2021/22 tax year for SEISS were:
    – SEISS 4: 22 April 2021 to 1 June 2021
    – SEISS 5: 29 July 2021 to 30 September 2022
  • Test and trace or self-isolation payments in England, Scotland and Wales
  • The Coronavirus Job Retention Scheme (CJRS), also known as furlough
  • Eat Out to Help Out as a business
  • Coronavirus Statutory Sick Pay Rebate
  • Coronavirus Business Support Grants

For more information on which Covid-19 payments should be declared, follow this link here.

Didn’t declare your Covid payments? Here's how to amend your form

If you’ve already submitted your self-assessment tax return but didn’t declare coronavirus-related payments then you should tell HMRC asap.

The final deadline to declare Covid payments for the tax year 2021/22 is 31 January 2024 BUT don't wait this long as the longer you leave it, the higher fine you'll pay.

To amend your tax return, follow this link here.

How will I be charged for not declaring my Covid support payment?

If you get a fine this is due to taking a "lack of reasonable care" according to HMRC – but the amount you'll have to pay will depends on the reason for the error and the potential lost revenue.

HMRC wouldn't say whether people could be charged hundreds or thousands of pounds but the maximum amount would be 100% of the extra tax owed – this is only if you deliberately conceal your support payments and then hide that from HMRC.

The potential lost revenue is an additional amount of tax which is due or payable as a result of correcting the inaccuracy.

For example, if:

  • A penalty arises because of a lack of reasonable care, the penalty will be between 0% and 30% of the extra tax due
  • The error is deliberate, the penalty will be between 20 and 70% of the extra tax due
  • The error is deliberate and concealed, the penalty will be between 30 and 100% of the extra tax due

The penalty can be reduced if you or your client tells HMRC about the error. 

HMRC may make further reductions depending on the quality of the disclosure.

Penalties can be reduced by:

  • Telling HMRC about the errors
  • Helping HMRC work out what extra tax is due
  • Giving HMRC access to check the figures

See here for more info on penalty calculations

How to file your self-assessment tax return

If you haven't yet filed your self-assessment tax return, you can do so online (the date has now passed to do it via post).

To file it online, follow this link to the website here and click "start now".

It should be pretty straightforward and there’ll be an option to select you’ve received support payments and then what those payments were. 

If you did not file a self-assessment tax return last year, then you’ll need to register first – you can do so here. 

If you do not submit it by 31 January 2023, you’ll have to pay a late fee of £100. 

Read More on The Sun

I did a £5 shop at Aldi to last me all week – here’s everything I got

I’m 17 & already a mum… trolls say I only got pregnant to get benefits



Source: Read Full Article