Winter is the season of taxes for many people, as people who have left it later or have needed to navigate various exemptions are starting to work alone or with a tax accountant to get their financials in order in time for the 2020/21 deadline.
The deadline for submitting a tax return and paying any outstanding tax is midnight of 31st January, although the earlier you start, the easier it will be to access help and advice as required, and avoid the month-long rush that starts on Christmas Day and only intensifies through January.
Many more people than usual are expected to need to submit a self-assessment as well for the 2021/22 tax year due to several grants and support funds that would need to be reported.
Typically, there are seven main reasons why someone would need to submit a self-assessment:
Are self-employed and made over £1000 in turnover in the past tax year,
Have claimed expenses totalling over £2500,
Have received £2500 in untaxed income, such as commissions, bonuses or tips,
Earned more than £100,000 in the past year regardless of income,
Have earned income from outside of the UK that needs to be paid for,
Received Child Benefit with an overall income of over £50,000,
Earned £2500 from renting out property.
However, people will also need to declare some grants or payments made to them through various support schemes over 2020 and 2021 as they are considered taxable income.
These include, for example:
Furlough schemes when that payment was not already taxed through an employer’s payroll system,
Self Employment Income Support Scheme
Payments for self-isolation,
Local authority grants as distinct from the national scheme,
Eat Out to Help Out vouchers.