Why filing your tax return late could cost you £15,000
Chancellor Rishi Sunak announced details of the fourth and fifth SEISS grants in last week’s Budget.
The fourth grant will cover February to April, offering up to 80% of trading profits up to a maximum of £7,500.
For the fifth grant, available from July, people whose turnover has fallen by 30% or more will continue to get 80% of average profits. Those whose turnover has fallen less than 30% will receive a 30% grant.
Eligibility of the SEISS grants has been widened to include about 600,000 people who became self-employed in the 2019-20 tax year. To qualify, you must have filed your 2019-20 self-assessment tax return by 2 March 2021.
Research by personal tax app Untied found there were about 1.1 million 2019/20 self-assessment tax returns outstanding at the beginning of March 2021. This is nearly 10% of all expected tax returns.
Kevin Sefton, spokesperson for Untied, said: “The chancellor has said that only those self-employed individuals who filed a 2019-20 self-assessment tax return by midnight on 2 March 2021 will be eligible for rounds four and five of Self-Employment Income Support Scheme (SEISS) grants. Therefore, these figures indicate that almost one in 10 people will still be excluded from these grants.
“There were record numbers of tax returns outstanding on 31 January 2021 and our analysis shows that the numbers outstanding remain much higher than in previous years. These figures are exceptional, and many of these people will have struggled to file their taxes because of the coronavirus pandemic.”
More than 1 million people now face the possibility of a £100 penalty for not filing a tax return and some of these people also now face the double blow of missing out on the chance to claim the next two SEISS grants, worth up to £15,000 in total.
Sefton said: “We appreciate there may be practical difficulties to overcome for HMRC in giving a further extension for outstanding returns, but we are surprised and shocked by the large numbers still not filed and concerned that many individuals will miss out on claiming much needed financial support, when coronavirus is potentially the very reason why they could not meet their return obligations.
“We therefore urge the government to consider allowing a further grace for these people. We also encourage anyone that still has to submit their taxes to do so as soon as possible and endeavour to pay anything you might owe by 1 April 2021. If this is not possible, do speak to HMRC and arrange a payment plan.”