All information regarding what to do if you have received a letter stating that your self-assessment tax returns are incorrect, along with payment options for deferred tax returns can be found here.
What To Do If You Are Asked To Correct Your Tax Return
In order to cross-check the information that is submitted on your self-assessment tax returns, HMRC will use data from several different sources, such as banks and land registries. Should they flag any areas that are not a match between their third party data and your 2018-2019 tax return, they are likely to send you a letter asking you to review your submission. Unfortunately, the letter features standard, automatically generated text, which means that it will not detail exactly what is missing. It means that it becomes your responsibility to determine the issue and take any further action.
If you are to receive a letter from HMRC, it is important to keep in mind that this does not necessarily mean that a tax investigation has been opened. However, it does mean that you need to assess your submission to prevent any future problems. We are able to help you with this so please do not hesitate to get in touch if you require support.
How To Tackle Tax That Has Been Deferred To 2021
As a business owner, you will be aware that any income tax payable by the 31st July 2020 was automatically deferred to the 31st January 2021. Although this was convenient at the time, this does mean that the bill for January 2021 will be significantly bigger. As well as this, you will also be required to pay any capital gains tax for 2019-2020.
If you know that paying back these taxes will prove a struggle, then you are able to apply for ‘time to pay’ to spread the balance over 12 monthly instalments. This can be applied for online ahead of time or 60 days before the tax is due. If you do not owe more than £30,000, then your request for ‘time to pay’ should be automatically granted. However, if it is more than this figure, then you will need to arrange a tailored agreement with HMRC. To do this, you can call the self-assessment payment helpline on 0300 200 3822.
The VAT payable between the 20th March to the 30th June 2020 was also automatically deferred to the 31st March 2021. This debt can be settled in full or in instalments before the 31st March 2021. However, if the VAT due is still outstanding by that date, you will be able to opt into a new payment scheme to pay off the debt over 11 instalments. You will be charged interest on the outstanding tax from the date it was deferred until it is paid in full.