Millions of self-employed face double tax bill this January
Sole traders still due to pay their deferred 2019/2020 self-assessment payment in July face a double tax bill this month.
According to Intuit QuickBooks, a quarter (25%) of the UK’s self-employed – 3 million people – could be facing the extra payment.
Those who deferred the payment due in July 2020 will have to pay the bill, alongside January’s payment, on 31 January 2021.
According to Intuit, more than a quarter of sole traders (26%) say they will find it harder to pay their tax bill this year due to the financial impact of the pandemic. A fifth (21%) say they are less confident in completing their return accurately because of the inclusion of Covid-19 grants.
As a result, HMRC is being more lenient towards late submissions this year.
Whilst the tax office is still encouraging as many people to file on time as possible, if an applicant has been adversely impacted by Covid-19 it will accept that as a ‘reasonable excuse’ for penalties to be waived, though penalties for paying tax late will broadly still apply.
In normal times, as many as two in five (42%) sole traders say they have been fined for making mistakes or missing deadlines – paying an average total of £389 in penalties.
Pauline Green, head of product compliance at Intuit QuickBooks, said: “Sole traders and self-employed individuals have never faced such challenging circumstances and with other areas requiring focus, the burden of admin can be an unnecessary drain on time and resources.
“Today’s findings reveal that less than a third of sole traders are confident they know where they’ve kept their records. Using the right digital tools not only keeps track of financial information, but also gives business owners the confidence they’re filing their tax accurately. Speeding up this process means the self-employed have time to focus on what really matters: running and growing their business.”