HMRC threatens bogus penalties
Correspondence from HMRC suggests there's a penalty if you don't pay your self-assessment tax bill by Saturday, 31 January. This isn't strictly true, but what are your options if you can't pay on time?
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HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
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Double up on the employment allowance
You’re the sole shareholder of a limited company which employs several members of staff. You’re working on plans to start another business with an ex-colleague. Can both businesses benefit from the full employment allowance (EA)?
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VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
If you're signed up to receive reminders from HMRC about self-assessment, you'll have received several texts and/or emails about the filing and payment deadline, which is 31 January (this Saturday). The reminders may be helpful for some, but the scaremongering tactics are not. The most recent text begins with "Remember to pay by 31 January to avoid a penalty". Whilst the payment deadline is 31 January, it simply isn't true that you'll be charged a penalty if you don't pay on time. Whilst we don't advise missing the deadline, the fact is late payment penalties don't kick in until you're 30 days late as stated online.
However, you will be charged late payment interest, at 7.75% per annum. As far as interest rates go, this is eye-wateringly high, but if you need a few days to make the payment it isn't likely to break the bank. For example, if your tax bill is £3,000, the late payment interest charge is less than £4.50 per week.
If you're in real financial difficulty you should contact HMRC as soon as possible to agree a payment plan.
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