The Low Incomes Tax Reform Group (LITRG) is reminding people that there is just a week to go before the 31 October 2019 deadline to file paper tax return forms.
LITRG is particularly concerned that people may not be aware of the trading and property allowances. Both of these allowances were introduced in the 2017/18 tax year and individuals can use one or both of them to receive up to £1,000 in tax-free allowances for property and/or trading, casual or miscellaneous income each year, subject to certain conditions.
You should contact HMRC to say you do not need to complete a tax return if you have qualifying income covered fully by these allowances and there is no other reason to complete a Self Assessment tax return.1
Victoria Todd, Head of LITRG Team, said:
“Completing your tax return can be a daunting exercise. If you have low levels of income from self-employment, casual earnings or renting property, then we recommend you check whether you actually need to complete a tax return if this income is covered fully by the trading and property allowances.2 If you are uncertain whether you need to complete a return or know you no longer need to, you must contact HMRC and explain why this may be the case. HMRC should then confirm in writing that you are no longer required to submit a return.
“It is important that you keep a record of all income and expenses related to these trading and property activities so you are aware of whether this income is fully covered by the allowances. For example, if you did not complete a tax return for 2017/18 because your earnings fell within the trading and /or property allowances, but in the 2018/19 tax year your earnings are above either of the allowances, you must submit a tax return on time to avoid late filing penalties even if there is no income tax or National Insurance to pay."
People who want to submit a paper tax return to HMRC for 2018/19 should do so by 31 October 2019. If a paper tax return is submitted after this date in paper form rather than online then a £100 penalty will automatically be charged, with penalties potentially rising up to £1,600 depending on the length of the delay. This penalty can be avoided by submitting an online return instead of a paper return by 31 January 2020.
LITRG is warning people to allow at least 10 working days before 31 January 2020 to complete and send their online tax return to HMRC if they are using Self Assessment online for the first time. This is because they will need to enrol into and ‘activate’ HMRC’s online Self Assessment service first using a code they will be sent in the post. Up to 20 days may be needed if the person does not have a Unique Taxpayer Reference (UTR) number already.
Victoria Todd said:
“If you do not think you will make the 31 October 2019 deadline it is best not to submit a paper return late as you will get a penalty but, if possible, to register for HMRC online services and so file by 31 January 2020 instead.”
A total of 10,833,177 tax returns were received by HMRC by 31 January 2019. Of these, 10,129,234 returns were filed online and the rest were paper filed.