Time ticking away for expats to file tax returns

Time is running out for expats who want to avoid automatic fines for failing to file their tax returns online and pay any tax due.

The original January 31 deadline for filing self-assessment tax returns was extended to Sunday, February 28 by HM Revenue & Customs to help taxpayers whose financial affairs were impacted by the COVID-19 pandemic.

But the tax due was still payable by January 31.

Now, the final deadline is looming. Anyone who has not filed their return will face an automatic £100 fine and further penalties for longer delays.

New deadline to avoid tax penalty

The tax should already have been paid, but outstanding amounts attracting daily interest must pay a further penalty on Thursday, April 1, which adds up to 5% of the unsettled tax bill.

If taxpayers cannot pay, if they set up a payment schedule by April 1, the fine will be waived.

Nearly 1.8 million taxpayers missed the January 31 deadline and must file their returns by midnight on February 28.

The late filing penalty for the return applies regardless of if any tax is due, while the 5% tax penalty applies to unpaid income tax, national insurance contributions Class 2 and 4 NIC) and student loan repayments.

First tax payments on account for next year due in January are excluded.

COVID-19 as an excuse

Victoria Todd, Head of the Low Income Tax Reform Group, said: “If you have not filed your tax return yet, even if there is no tax due or you are able to settle the amount you owe on or before April 1, 2021, we strongly suggest you get your tax return submitted as soon as possible. 

“Not only is interest accruing on any outstanding tax but leaving it until the last minute risks a late filing penalty if something unforeseen happens to prevent you from filing on or before February 28, 2021. Depending on the facts, you may not be successful at appealing any penalty if you had no good reason for missing the statutory filing date of January 31, 2021.”

HMRC has already agreed to waive penalties for taxpayers who can show the COVID-19 pandemic had a direct impact on their tax affairs, but they must still file their returns and settle tax bills as soon as they can.

The current filing season relates to the tax year from April 6, 2019 to April 5, 2020.

Find out more about appealing HMRC late filing penalties

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