If you are considering submitting a 2020/21 Paper Tax Return to HMRC, do not forget that the deadline for submission is 31 October 2021. HMRC do not issue Paper Returns automatically to encourage electronic filing by 31 January following the year-end (31 January 2022 for 2020/21 Tax Returns).
Extensions to the Reporting Deadline
If your notice to file a Return was issued after July 2021 the deadline for filing a Paper Return is extended to 3 months following the date the notice to file was issued. The deadline remains 31 January 2022 for an electronically filed 2020/21 Tax Return.
HMRC are experiencing significant delays in addressing electronic requests for Unique Tax Payer References (UTR), which are needed to file a Tax Return. If your notice to file is issued after 31 October following the end of the tax year (having been requested prior to 6 October), then the deadline for filing the Return (whether paper or online) is 3 months from the date the notice to file is issued. For example, if the notice to file the 2020/21 Tax Return is issued on 29 December 2021 you have until 28 March 2022 to file your Return, be it paper or online.
If notification that a Return is needed was not made to HMRC prior to 6 October, then the tax payment deadline remains 31 January and all the usual interest and late penalties will apply to a late payment.
Taxable Support Payments
Taxable support payments were made by HMRC during the Coronavirus lockdowns. Whilst the payments must be included on your Tax Return, any overpayments must be reported under separate cover within 90 days of the date the incorrect Coronavirus support payment was received.
If this deadline is missed, HMRC may charge penalties and treat the failure to notify as deliberate and concealed, whether it is or not.
Selling a UK residential property
Should you sell a UK residential property which is not your main home, then you may need to report this disposal under separate cover as well as reporting it on your Tax Return.
For disposals that complete on after 27 October 2021 there is a 60 day deadline to both report the disposal to HMRC and pay any tax on the gain. Disposals made prior to this date had a 30 day reporting deadline.
There are exceptions; for example, if there is no gain or the property is transferred to your spouse. However, with interest and penalties where the tax payment is late or insufficient to cover the actual tax due, it is important to get this right.
In all the scenarios above, the onus is on the tax payer to report to HMRC. Failure to notify HMRC of chargeability, submit a Return, or meet your tax liabilities in a timely manner can incur serious penalties and interest charges.
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