Self-employed people yet to submit their 2018/19 self assessment tax return have until 23 April 2020 or risk missing-out on potential financial support from the Government during the COVID-19 outbreak, says the Low Incomes Tax Reform Group (LITRG).
The Government announced recently the Self-employed Income Support Scheme (SEISS) which provides grants to self-employed individuals who have lost profits due to the COVID-19 outbreak. The starting point to see if people qualify for the scheme is the level of their profits from self-employment shown on their 2018/19 tax return. If someone is yet to file their 2018/19 return (which should have been done by 31 January 2020), the Government says they should file by 23 April 2020 to enable HMRC to contact them if they are eligible for SEISS.
Victoria Todd, Head of LITRG, said:
“We urge self-employed people to act now and complete any outstanding 2018/19 tax returns so they do not miss out on the cash grant offered through the Self-employed Income Support Scheme, if they meet the qualifying conditions.
“For those who were self-employed in 2018/19 but still need to register with HMRC, the closeness of the 23 April 2020 deadline means they should register for self assessment immediately. If possible, this should be done online rather than telephoning HMRC or sending the registration by post. There may be delays in HMRC answering calls and dealing with post due to the COVID-19 outbreak. It is very important to act now because it can take up to two weeks for login details for the online service to arrive from HMRC.
“Completing a tax return can be a daunting experience for many people but help is available for those who need it. LITRG has published online guidance to help people understand the support scheme and what they are eligible for, and also to help with completing self-employed accounts and tax returns.”
The tax charity TaxAid has also set-up a dedicated helpline (0345 120 3779) for those on low incomes who need more help completing their 2018/19 tax return and accessing the scheme. LITRG is encouraging people to make use of this service to ensure they do not miss out on potential support.
Notes for editors
1. LITRG has published a more in-depth article on SEISS and tax returns on its website here, and information on the SEISS generally here.
2. Self-employed individuals have only a little over two weeks to get figures sorted out and tax returns prepared and submitted. For those who need help with this, LITRG has produced a helpful booklet ‘Self Employment: A LITRG Guide’ with examples of how to complete the self-employed accounts needed for a tax return. Those on low income can call the tax charity TaxAid (www.taxaid.org.uk) on 0345 120 3779 (9am-5pm, weekdays) who will be able to assist with the preparation of tax returns. More from LITRG here.
3. HMRC are yet to confirm whether they will impose the usual late tax return filing penalties in connection with any 2018/19 tax returns filed by 23 April 2020.
4. The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to eligible self-employed individuals or partnerships, worth 80 per cent of their profits up to a cap of £2,500 per month.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June. More here.
5. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact CIOT External Relations on 0207 340 2702 / Out of hours contact: George Crozier, 07740 477 374