HMRC has revealed that more than 10.7 million taxpayers submitted their 2019/20 Self Assessment tax returns by the 31 January deadline.

The remaining 1.8 million whose tax return is now late will not be charged a late filing penalty provided they submit their return online by 28 February.

Taxpayers who did not pay their Self Assessment tax bill by 31 January are now incurring interest on the outstanding balance and should pay their bill as soon as possible.

Taxpayers should pay any outstanding balance, or arrange a payment plan, before 3 March 2021 to avoid a 5% late payment penalty.

Those who are not yet able to file their tax return should pay an estimated amount as soon as possible, which will minimise any interest and late payment penalty.

Karl Khan, HMRC’s Interim Director General for Customer Services, said:

‘Thank you to the 10.7 million customers who have sent in their tax returns.

‘We won’t send anyone a late filing penalty if they complete their tax return by 28 February.

‘We know that many individuals and small businesses are finding it harder to pay this year, due to the pandemic. Anyone who can’t afford to pay their tax bill in full can set up a payment plan, once they’ve filed their return, to spread their tax bill into monthly instalments.’

There are several ways that taxpayers can pay their Self Assessment tax bill or an estimated amount. They can pay online, via their bank, or by post.

Anyone who cannot pay their bill in full can apply to spread the cost. Taxpayers can set up a payment plan, in up to 12 monthly instalments, online via https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments provided they meet the following requirements:

Taxpayers need to have no:

• outstanding tax returns
• other tax debts
• other HMRC payment plans set up.

The debt needs to be between £32 and £30,000.

The payment plan needs to be set up no later than 60 days after the due date for payment. Taxpayers should set up the payment plan as soon as possible, and certainly before 3 March to avoid a 5% late payment penalty.

Those who do not meet these requirements, or who need more than 12 months to pay their bill, can apply for a payment plan by speaking to one of HMRC’s debt advisers.

Interest accrues on all outstanding balances, including those in payment plans.

Self Assessment taxpayers who are required to make Payments on Account, and know their 2020/21 tax bill is going to be lower than in 2019/20, for example due to loss of earnings because of COVID-19, can reduce their Payments on Account. More information is available at  https://www.gov.uk/understand-self-assessment-bill/payments-on-account.

Internet link: GOV.UK press release

HMRC has published the names of 139 named companies that failed to pay minimum wages amounting to £6.7 million to over 95,000 workers.

HMRC has named 139 companies, including major household names, that have underpaid their employees and have been fined. The offending companies failed to pay £6.7 million to their workers, in a breach of employment law.

This is the first time the government has named and shamed companies for failing to pay National Minimum Wage since 2018, following reforms to the process to ensure only the worst offenders are targeted.

Business Minister Paul Scully said:

‘Paying the minimum wage is not optional, it is the law. It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list.

‘This should serve as a wake-up call to named employers and a reminder to everyone of the importance of paying workers what they are legally entitled to.

‘Make no mistake, those who fail to follow minimum wage rules will be caught out and made to pay up.’

Internet link: GOV.UK news

Finance Secretary Kate Forbes delivered the 2021/22 Scottish Draft Budget on Thursday 28 January 2021, setting out the Scottish Government’s financial and tax plans.

The Government has devolved powers to set the rates and bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers.

The Scottish Budget announced the following income tax rates and bands for 2021/22. These will be considered by the Scottish Parliament, and an agreed Scottish Rate Resolution will set the final Scottish income tax rates and bands for 2021/22.

The current rates and bands for 2020/21 and the proposed rates and bands for 2021/22 on non-savings and non-dividend income are as follows:

* Assumes individuals are in receipt of the Standard UK Personal Allowance.

** the personal allowance will be reduced if an individual’s adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000.

In the UK Spending Review in November 2020, the UK Government announced that the UK wide Personal Allowance and the UK higher rate threshold would be uprated by CPI inflation of 0.5% for the tax year 2021/22 (to £12,570 and £50,270 respectively). All other policy decisions about UK rates and bands will be announced at the UK Budget on 3 March 2021.

The Personal Allowance is £12,500 for 2020/21. Across the rest of the UK the basic rate of income tax is 20%. In 2020/21 the band of income taxable at this rate is £37,500 so the threshold at which the 40% band applies is £50,000 for those entitled to the full personal allowance. UK taxpayers pay 45% tax on their income over £150,000.

Internet link: GOV.SCOT publications

On 28 January, Finance Secretary for Scotland, Kate Forbes, outlined plans for Scottish spending and taxation in the 2021/2022 Scottish Budget.

In the Budget, Ms Forbes announced plans to continue first-time homebuyer relief, which raises the nil-rate band for Land and Buildings Transaction Tax (LBTT) to £175,000. The Budget also highlighted plans to return the ceiling of the nil-rate band for residential LBTT to £145,000 from 1 April, as planned.

The starter band, basic band and higher rate thresholds of Scottish income tax will rise by inflation, whilst the top rate threshold of income tax will be frozen in cash terms at £150,000.

The Budget confirmed that the introduction of Air Departure Tax (ADT) will be deferred until a solution to the Highlands and Islands exemption has been found.

In regard to spending, the Scottish government will release £500 million to support businesses, public services and health during the coronavirus (COVID-19) pandemic. Ms Forbes said that this money is being allocated from what is expected to come to Scotland from the UK’s £21 billion COVID-19 reserve.

The Finance Secretary said: ‘This Budget is focused on delivering tax policies that will support economic recovery and maintain our commitment to creating a fairer and more progressive tax system. It is about striking the right balance between raising the revenue required to fund our public services and supporting the economic recovery through targeted interventions.’

Chancellor Rishi Sunak has extended the Coronavirus Job Retention Scheme (CJRS) until the end of April 2021.

Businesses adversely affected by the coronavirus (COVID-19) can make use of the CJRS until the end of April, with the government continuing to pay 80% of employees’ salaries for hours not worked. Employers will only be required to pay wages, national insurance contributions (NICs) and pensions for hours worked, and NICs and pensions for hours not worked.

Additionally, Mr Sunak stated that he is extending COVID-19 business loan schemes until the end of March 2021. Businesses will be given until the end of March to access the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). These schemes had been due to close at the end of January.

The Chancellor also confirmed that the 2021 Budget will be delivered on 3 March 2021 and will outline the next phase of the government’s plan to combat COVID-19 and protect jobs.

The Chancellor said:

‘Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy recover and protecting livelihoods across the country.

‘We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support.’

Internet link: GOV.UK news