Moore Accountancy January 2022 Tax Return Update
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Moore Accountancy Update

Happy New Year!

We do not usually send out a January newsletter as the team spend this month focusing on tax returns.

HMRC however have announced an extension to the January 31st filing deadline.

This will be a welcome announcement for many agents due to recent staffing issues driven by the number of Covid cases this last month.

Nearly half the Moore Accountancy team have been impacted over recent weeks with either themselves or their families suffering with Covid, and of course the return to working from home guidance.

We are sure it is driven by HMRC's own ongoing issues where they appear to be struggling with self isolation and staff sickness. 

We are finding that HMRC are taking over a month to open post, and there are very long delays in penalty appeals and other investigation work we are undertaking with them.

HMRC are also suspending their online chat facility, which implies further internal issues at their end with service provision; which of course has a knock on effect for both agents and taxpayers.

MA opinion:
We will still be aiming for a January 31 deadline where possible, as it
  • means that HMRC can not extend the window of any enquiries
  • taxpayers will not have to pay 2.75% late payment interest on tax due by 31/01/22 (this applies for both Payments on Account and Balancing Payments)
  • Tax Credit claimants are not delayed
  • allows a consistent deadline for both clients and us, and reduces the need for any later penalty appeals if required
Notice from HMRC:
HMRC has announced that we will not charge: 
1. Late filing penalties for those who file online by 28 February 2022. 
2. Late payment penalties for those who pay the tax due in full or set up a payment plan by 1 April 2022.

This will give customers and their representatives additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging customers to file and pay on time if they can – almost 6.5 million have already done so.  
Our Time to Pay options are still available to assist customers. Once they have filed their 2020-21 tax return, customers can set up an online payment plan to spread Self Assessment bills of up to £30,000, over and up to 12 monthly instalments.   

The payment deadline for Self Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding.

Normally a 5% late payment penalty is charged on any unpaid tax that is still outstanding on 3 March. This year, like last year, HMRC is giving customers more time to pay or set up a payment plan.

Self Assessment customers will not be charged the 5% late payment penalty if they pay their tax or set up a payment plan by midnight on 1 April.
They can pay their tax bill or set up a monthly payment plan online at GOV.UK.  

There is no change to the filing or payment deadline and other obligations are not affected. This means that:   
•     interest will be charged on late payment. The late payment interest rate from 4 January 2022 is 2.75% 
•     a return received online in February will be treated as a return received late where there is a valid reasonable excuse for the lateness.

This means that: 
◦     there will be an extended enquiry window 
◦     for returns filed after 28 February the other late filing penalties (daily penalties from 3 months, 6 and 12 month penalties) will operate as usual   
◦     a 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022. Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on tax outstanding where a payment plan has not been set up.

•     we will not charge late filing penalties for SA700s and SA970s received in February – these returns can only be filed on paper  

•     for SA800s and SA900s we will not charge a late filing penalty if customers file online by the end of February – the deadline for filing SA800s and SA900s on paper was 31 October. Customers who file late on paper will be charged a late filing penalty in the normal way, they can appeal against this penalty if they have a reasonable excuse for filing their paper return late

•     self-employed customers who need to claim certain contributory benefits soon after 31 January 2022, need to ensure their annual Class 2 National Insurance contributions (NICs) are paid on time – this is to make sure their claims are unaffected. Class 2 NICs are included in the 2020 to 2021 balancing payment that is due to be paid by 31 January 2022.

Benefit entitlements may be affected if they:  
◦     couldn’t pay their balancing payment by 31 January 2022, and  
◦     have entered into a Time to Pay arrangement to pay off the balancing payment and other self assessment tax liabilities through instalments. 

Affected customers should contact HMRC on 0300 200 3822 for help as soon as possible. 

Moore Accountancy will continue with hybrid working for the forseeable future, as on the whole it works with the team dynamics and their welfare, both mentally and physically.

Emails will continue to be passed to the relevant team member and dealt with as if they were in the office.

If you have missed any of our previous newsletters, then our website has a backlog of them here.

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Moore Accountancy · 1 Northway · Altrincham · Cheshire, WA14 1NN · United Kingdom

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