Self-employed warning as important deadline on tax payments falls today – act now
Self-employed people will have to take action at varying points in the year to ensure their tax affairs are dealt with. Some of the most important actions are payments on account – made twice a year by self-employed people who pay via Self Assessment. This can spread the cost of the upcoming year’s tax, and so can be a useful action to take.
But in this sense, an important deadline falls today – as July 31, 2021 is the date which a second payment on account needs to be filed by.
If a person files a Self Assessment tax return, their tax bill was more than £1,000 last year, and less than 80 percent of their income is taxed using Pay as You Earn (PAYE), then this deadline is important.
The second payment covers the second half of tax for the 2020/21 tax year.
A bill is based primarily on the tax a person would have paid prior to the pandemic in the the 2019/20 tax year.
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Mr Parkes highlighted this as a year a particular unusual one, due to the impacts of COVID-19.
As a result, the Self Assessment process may throw up new challenges for those who have to complete the process.
It will therefore be essential for individuals to check the payment on account requested by HMRC is accurate.
Mr Parkes continued: “Last year, people were given the option to defer their second payment – due July 31, 2020 – on account for the 2019/20 tax year until January 31, 2021.
This, Mr Parkes explained, should contain details of all of a person’s income, even if tax has been deducted at source.
Many individuals will feel comfortable waiting until January 2022 to take this action.
However, leaving it to the last minute could cause errors, and less time to react to these and make sure everything is accurate.
Filing early will offer Britons confirmation of their tax bill with ample time to spare.
And it will also allow individuals to be able to plan for tax payments which may be due in January and July 2022.
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