THE self-assessment tax return deadline is coming around fast but many Brits may not be able to submit theirs in time. 

Self-employed workers must file a tax return to HMRC by 11.59pm on January 31 2021 or incur penalties that start at £100. 

Around 5.4 million Brits were yet to file as of January 5, according to HMRC.

While there is no way to extend the deadline, the taxman will waive the penalty fee if a person has a “reasonable excuse” as to why they are late.

This year, HMRC said it will accept Covid disruption as a valid reason for not being able to submit it on time but only on a case-by-case basis.

An HMRC spokesperson said: “We want to encourage as many people as possible to file on time even if they can’t pay their tax straight away.

How do I fill in the tax return?

BEFORE you can complete and submit your tax return, you’ll need to have a unique taxpayer reference (UTR) and activation code from HMRC.

This can take a while to receive, so if it's the first time you're completing self-assessment, make sure you register online as soon as possible.

To sign in or register visit the "Self Assessment tax return" section of HMRC's website.

If you've already signed up for self-assessment, you can find your UTR on relevant letters and emails from HMRC.

HMRC accepts your payment on the date you make it, not the date it reaches its account – including on weekends.

So if you want to pay by bank transfer you can do so up until the evening of January 31, but it's best to get it out the way in advance.

If you need to change your tax return after you've filed it, you can do so within 12 months of the original deadline or you can write to HMRC for any changes after that.

Filling in your tax return can seem daunting, but with our step-by-step guide you'll have it sorted in no time.

"But where a customer is unable to do so because of the impact of Covid-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that."

Here we take a look at how the penalties work, how to appeal against them and what counts as a “reasonable excuse”.

What are the penalties for filing late?

Anyone who files after the January 31 deadline will automatically get a £100 penalty – even if there’s no tax to pay. 

If you still haven't submitted your return after three months, you may have to pay a penalty of £10 a day for a maximum of 90 days.

For payments late by six months, you'll be fined 5% of the tax you owe or £300, whichever is greater.

This could rise even more if the delays are later than this – you can calculate how much your fine will be on the Gov.uk.

How to appeal against late penalty fees?

Normally, late payers have 30 days to appeal a penalty, which starts at £100, but this year HMRC has extended it to four months due to the pandemic.

To appeal the late penalty fee, you can use the online service or print and post a form off.

For the online service, you need a Government Gateway user ID and password. If you do not have one, you can opt to set it up for free.

Users must enter the reference shown on your penalty notice and give your national insurance number.

You will also need to provide the date the penalty was issued, the date you filed your tax return if you’ve filed it and details of your reasonable excuse for filing late.

Once you’ve submitted the form, you’ll get a reference number to track the progress of your appeal.

For those appealing by post, you'll need to complete an SA370 form.

You’ll need to enter the penalty notice reference number, national insurance number, date of fine, amount and details of your reasonable excuse. 

You must then post it to: Self Assessment, HM Revenue and Customs, BX9 1AS.

HMRC has said it is currently looking at how to make the appeals process easier and quicker for taxpayers to use – so the process for this may change in the coming weeks.

What counts as a reasonable excuse?

This year, pandemic-related personal or business disruption will be accepted as a "reasonable excuse" for being unable to file your tax return on time.

If your reason is accepted, HMRC will cancel penalties as long as you file as soon as you can. 

However, the department has not been clear on exactly what constitutes a valid coronavirus-related reason – whether that’s looking after an unwell family member or running out of time due to homeschooling. 

HMRC said it will only look at each situation on a case-by-case basis.

If you’re unsure whether you have a valid excuse, you can contact HMRC directly to check.

Other reasons HMRC will accept for not filing your tax return includes:

• Your partner or another close relative dying shortly before the tax return or payment deadline.
• You had an unexpected stay in hospital that prevented you from dealing with your tax affairs.
• You had a serious or life-threatening illness.
• Your computer or software failed just before or while you were preparing your online return.
• Issues with HMRC's online services.
• A fire, flood or theft prevented you from completing your tax return.
• Postal delays you could not have predicted.
• Delays related to a disability you have.

It's important to note that taxpayers who are struggling to get hold of the business information required in time for their self-assessment return will not be exempt from penalties.

If this is you, HMRC recommends you submit provisional figures by the January deadline and then provide the actual figures as soon as they can. 

On Christmas Day this year, 2,700 Brits people filed their tax returns, in comparison to over 3,000 people who did the same thing last year.

Last year, HMRC hit hundreds of taxpayers with £100 late fines despite filing on time.

While in February, a woman got a £1,316 HMRC tax fine refunded after The Sun stepped in.

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