Many happy returns?

As I write this, we have just finished the tax return season. “But it finished in January!” I hear you cry. Well, no. This year HMRC in its wisdom decided to extend the deadline for a month. And when I say extend, I mean no fines for missing the deadline but still having to pay interest on money owed.

This was done last year, but we were all still very much still suffering from the effects of lockdown, both financially and physically in our ability to get things to each other, so it was a great help. In my opinion, I believe this extension was really to buy a bit more time for HMRC’s beleaguered systems and staff.

This year, however, the extension also brought confusion and stress. Many of our beloved clients were just so battered and bruised by the past few years that we more or less had to carry them over the line. Nationally, more than a million people still submitted their returns during February.

A word from the heart to those of you who still haven’t submitted your tax return. According to HMRC, there are about “1.3m customers who were expected to file by the January 31 deadline but did not do so by February 28”.

Interest rates of 2.75% being attached to outstanding tax returns since February 1, increasing to 3% on February 21, meaning that any of you who didn’t make the original deadline will still end up out of pocket. As many of you probably know, late filers are also looking at a £100 penalty, and if people continue not to file, these carry on, so please even if you missed the boat, jump in a canoe, and get it sorted.

If you are subject to penalties, but still need to get that return done, you do have options. HMRC says: “We understand some customers might be worrying about paying their selfassessment bill this year, and we want to support them. To see if you’re eligible to set up a payment plan, go to gov.uk and search ‘pay my self-assessment’.”

We have always advised people to seek to set up payment plans. Sometimes it does mean an uncomfortable talk with arevenue officer online, but you do have the Taxpayers’ Charter on your side, which in effect says you must be treated fairly.

THE SEISS GRANT – A WARNING

Even though the tax returns are in, I have a warning for everyone, which may mean many people will have to take the opportunity to amend their return (yes, it is allowed, but best done by an accountant). You could over the pandemic apply for up to five separate self-employed income support scheme (SEISS) grants between May 2020 and September 2021, but the day of reckoning was this tax year, and the grants must either be taxed or repaid. You should:

Accept that they are taxable. Sorry, folks, but they must go on the tax return.

Make sure your accountant knows. The grant had to be applied for directly so there was no way for accountants to know automatically. If you ‘by mistake’ forgot to tell your accountant, HMRC will follow it up, and their systems are scarily good.

Include details of the SEISS grant in your trading income if you claim working tax credits or universal credit.

THE GREAT UNTAXED

I can’t go without also mentioning what happens this April. From April 2022, taxi and private hire drivers will have to pass tax checks before renewing or applying for their licenses. It’s called Conditionality.

If you are paying tax, there’s no need to worry, though your licensing process will just take a little longer. If you are not registered for tax, don’t panic. You need to think about registering.

Just a word of advice; tax software on its own isn’t enough, if you haven’t been registered for a long time you will need some help, which an accountant can do with you and for you.

It’s something us trade accountants do quite regularly. You can find out more in our Tax Jargon Buster, a free online resource. You can find it here: https://www.eazitax.co.uk/resources/booklets Actually, I might as well offer all Professional Driver readers our Tax Jargon Book aimed at answering questions for any driver taxed or not. Just contact us and ask for a free copy.

Gary Jacobs is a director of Eazitax, an industry specialist accountancy practice. He sat on the original HMRC Conditionality panel and is currently involved with the major trade bodies in The Conditionality Campaign. Eazitax.co.uk/conditionality #conditionalitycuppa