HM Revenue & Customs (HMRC) has released a series of interesting facts about Self-Assessment as millions of taxpayers prepare to submit their annual tax returns.

For example, around 100,000 eager individuals filed their tax returns on 6 April 2020, which is the first day of the tax year.

Here are some other useful facts about the annual Self-Assessment process:

• In January 2011, around 3.4 million taxpayers completed a Self-Assessment tax return online (this has increased to an estimated five million in January 2021)
• This year’s deadline (31 January 2021) falls on a Sunday – the last time this occurred was 2016.
• The busiest filing day last year (and most years) was 31 January, with 702,171 returns completed
• The peak hour for filing last year was between 16:00 to 16:59 on 31 January when 56,969 customers filed
• HMRC has increased the self-serve Time to Pay threshold to £30,000 to help Self-Assessment customers spread the cost of their tax bill this year.

The release of these insightful facts coincides with the 20th anniversary of the launch of online tax returns. In 2001, the first year the system was introduced, some 38,000 online tax returns were filed.

In comparison, HMRC estimates around 11 million online tax returns will be filed in total this year, with more online submissions expected in future years as the nation moves towards a highly digitised tax system.

A Canadian woman has been fined for breaking Covid curfew rules, after she was discovered by police walking her husband on a dog lead.

Police in Sherbrooke, Quebec spotted the couple around 9pm, just after the rules took effect in that region of Canada.

The woman was questioned and claimed that her partner was, in fact, a dog, according to local media.

In the area in question, people are required to stay indoors between 8pm and 5am to prevent the spread of the Coronavirus. However, in an exception to the rule, dog walkers are permitted to be outside during this time.

Despite the couple’s claims, both of them were fined CA$1,546 (£893) even though they maintain they were acting within the rules for pets.

Isabelle Gendron, of the Sherbrooke Police Department, told La Tribune that they “did not co-operate with the police at all”.

According to the paper, the couple were not alone as 19 tickets for breaching the curfew were issued on the same weekend.

We don’t only support contractors we act for many other types of businesses, including the self-employed, limited companies and partnerships. It doesn’t matter whether it’s a small trader or large business we are always able to offer first class help and advice.

We have assisted our clients in making more than £1 million of furlough claims in 2020 and secured more than £3.5 million in tax and VAT refunds and are ready to offer our outstanding service to others.

We operate a generous referral scheme so spread the word to your friends and you can all relax and enjoy the benefits.

Click here to refer a friend.

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

If you would like Cogent to prepare and file your 2019/20 tax return and you have not yet sent us your completed personal tax return questionnaire, you will need to do so by 31 December 2020 to benefit from our discounted fee.

The standard charge including VAT for a basic tax return is £240. Questionnaires received by 31 December 2020 will receive a 50 per cent discount on the basic tax return, charged at £120. Any returns received after 31 December 2020 will be charged at the full rate of £240.

Please note, more complicated tax returns, where additional work or supplements are required, will be subject to additional charges.

• It is important to remember that even if your limited company has or is to be closed, it does not mean you are no longer required to file a Self-Assessment tax return. Only HMRC can release you from this responsibility and they will only do so providing you have no other sources of untaxed income.
• If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously; this is due to the changes to dividend tax from April 2016 which affect many dividends over £2,000 (£5,000 in 17/18).

Our Cogent deadlines have been set so that we can complete your return in time to meet the HM Revenue & Customs’ online filing deadline of 31 January 2021. Penalties for late filing of tax returns can be as much as £1,600, even when there is no tax due, so please ensure your tax return is filed on time, whether you ask Cogent to prepare it for you, or you have made other arrangements.

You can request a questionnaire by emailing tax@cogentaccountants.co.uk
Please complete the questionnaire and return it together with any attachments to tax@cogentaccountants.co.uk.

You are required to file a tax return if:

• You have been asked to file one by HMRC
• You have a tax liability for the year (e.g. tax on dividends or higher rate tax, or if you have any income which has not been taxed at source)
• You have a new source of income that needs to be declared

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

In October 2020, HMRC confirmed that for 2020/21, as a special year because of the Coronavirus pandemic and with so many people working so much from home, an employee can claim the full £6 per week working from home fixed-rate relief for the whole year EVEN if they only worked from home for some weeks or part-time.

That is relief of £312, which is worth a tax saving of £62 a year for a basic rate taxpayer and £124 a year for a higher rate taxpayer.

Normally, an employee can only claim the £6/week relief for weeks they have worked at home. It seems that the administrative headaches of stopping and starting the relief have resulted in HMRC effectively saying to employees “go on have relief for the whole year, just please stop calling us to ask about it”.

The only qualification is that you were required to work from home at some point in the tax year 2020/21. In future years, the rules will go back to claiming only for the recorded weeks worked at home.

How to claim the relief:

• For anyone who does a self-assessment tax return the claim should be made in the tax return. This is the simplest method.
• Contractors who submit expenses can put the claim through expenses, as the employer can pay this tax-free to the employee. If a contractor has already claimed for some then on the next claim, they can top up to the balance of the full £312 relief.
• Other employees who want to claim need to use a new dedicated working-from-home microservice to adjust their tax code. This will need to be done through your own Government Gateway ID. If you don’t have one you can create one as part of the process.

Following the introduction of tough new Coronavirus restrictions in England, the Government has confirmed that mortgage payment holidays will still be available to borrowers impacted by Coronavirus. The scheme had been due to end on 31 October 2020.

All borrowers affected by Coronavirus will be entitled to the six-month mortgage payment holiday. This includes those that have already benefitted from a mortgage payment holiday, who will be able to top this up to six months without a record being made on their credit file.

Earlier in the year, the Financial Conduct Authority (FCA) also fast-tracked new measures that forced banks and lenders to freeze loan, car finance and credit card payments, where requested, for up to three months to help those individuals whose finances were affected by the Coronavirus outbreak.

This has also now been extended for a further six months alongside the extension offered to mortgage holders.

Although payments will be frozen on any outstanding loans or mortgages, any borrowings will continue to accrue interest at the regular rate, which will mean that debts continue to grow in size.
Whilst taking a holiday won’t affect a person’s credit score or file, as outlined above, it could still affect their ability to acquire additional credit in future according to some reports.

It is recommended that you speak with your lender to ensure you can make use of these facilities. However, the FCA has said that borrowers who can afford to do so, should continue making repayments.

What a year it has been. Few people will be sad to see 2020 end, what with the global pandemic, economic uncertainty and, in the UK at least, ongoing confusion and conjecture over Brexit.

To say the year has been difficult would be to put things mildly. Gladly then, there is only one month left of the year from hell and we can hopefully look to a return to normality at some point in 2021.

Every day there is news of a new treatment or vaccine in the fight against COVID-19, with some sources suggesting that vaccination may begin in December for the most vulnerable people in society.

While it is clearly going to take some time to vaccinate everyone, by protecting those most at risk things should be able to open up again.

There is more good news that the UK economy managed to leave recession recently and even Brexit talks have been progressing – although at the time of writing no deal has been confirmed.

Looking ahead there are a number of delayed events that may now go ahead in 2021, here are some highlights:

The Tokyo Olympics

This exciting sporting event is due to commence on 23 July and will run until 8 August. It will be followed by the Paralympics, which start on 24 August and finish on 5 September.

Blockbusters return

No, not the long-dead video rental business, but big films that were delayed last year should be coming to the silver screen. Although some studios decided to stream films during the pandemic, others have held back, which should mean a bumper year for film fanatics.

Eurovision

We know that this may not be everyone’s cup of tea, however, the event was cancelled in 2020 and instead many of this year’s artists will be competing in 2021.

Music Festivals

The summer may seem far away, but hopefully, that will give the country time to reduce the rate of infection enough that we can once again enjoy music festivals in the sun. Many of the largest events haven’t confirmed anything yet, but music fans remain hopeful.

A train driver in the Netherlands has had a lucky escape after his train was saved – by a sculpture of a whale’s tail.

The statue, known as the “flukes” came to the rescue of the driver near the Dutch port city of Rotterdam, after his metro train ran through barriers at the end of the line.

The large train came to rest 10 metres above the water in which the sculpture, installed at the end of the metro tracks in 2002, is located.

The large crash woke up local residents when it happened at midnight and thankfully the driver escaped without injury. One nearby resident said: “It was a noise that lasted two or three seconds.

“I realized that there was something on the tail… I thought ‘Something very odd is happening here’.”

Unsurprisingly, the scene attracted lots of onlookers, who were told to move along for their own safety.

At the time, a spokeswoman for the local security authority, said: “A team of experts is investigating how we can make it safe and get it down. It’s tricky.”
Advertisement

The sculpture officially named Whale Tails is made of polyester and is the work of artist, Maarten Struijs.

Déjà vu – here we go again

Following on from April 2020 when the Off-Payroll rules were deferred to April 2021, we’re now starting to see activity again on Off-Payroll. Some agencies have contacted our freelance clients to say that the end client wants to start an Off-Payroll status assessment as the legislation is due to start in April 2021.

To remind us all, Off-Payroll is the label for new tax legislation that is really an wrapper for IR35 that has been with us for 20 years. This was due to start in April 2020 but at the last minute was differed for a year to April 2021. The bite to this new legislation is that it makes the end client responsible for the tax and national insurance relating to amounts paid to a freelancer, if that engagement is considered to be employment style rather than self-employment style. That changes the whole game of course, when the end client will potentially be hit hard both in their pocket and equally important in having to step up their whole engagement procedure to do status assessments.

This tax is wrong in all sorts of ways. It makes no real attempt to provide a proper framework for fair assessments, which review all the working circumstances between an engager and a freelancer. The CEST (Check Employment Status for Tax) tool HMRC provides for engagers to use and which they defend volubly, is naive of case law and simplistic to the nth degree. I think I could get my primary school grandchild to create a better tool. Come to think of it, maybe that’s how HMRC created their tool in the first place.

What is especially unfair in our Corona changed world is that the Government is throwing billions of pounds into the economy to protect employment and seems to have a complete blind spot that the Off-Payroll rules will challenge and very possibly destroy thousands of freelance positions, damaging both the economy and the honest livelihood of freelance contractors.

I URGE YOU ALL to please write to your MP’s to tell them that this madness must be stopped and a proper compliance system need to be set up to control this sector, not a quick fix solution which isn’t fair and doesn’t work. Please advise us of your communications with your MP and responses.

Please also let us know about any contact you have with agencies and end clients so we can get a good overview of what’s happening in the marketplace and provide you with advice on your options.

As always, we very much care about all our clients and are here to help you.

Best regards,

Victor Korman
Managing Director
Cogent Accountants

If your finances are impacted due to COVID-19, you can still apply for a payment holiday (meaning you needn’t make repayments) by the end of the month and you’ll get three months almost automatically. Payment holidays are available on mortgages, overdrafts, credit cards, personal loans, insurance, and motor finance. However, although the pandemic is far from over, this support scheme is being removed on 31 October and there is little that can be done after that.

Before taking a payment holiday, it is important to bear in mind that you should only take one if you need it as interest will continue to be charged. Many wrongly assume interest is frozen if you take a payment holiday – this is not the case and interest will still accrue. Additionally, the fact you are not making repayments will result in a higher outstanding balance on which further interest will be charged.

If, however, due to COVID-19, you are experiencing financial difficulties, it is far better to take a payment holiday than miss payments without agreement as this can impact your ability to get future credit.

Currently, these specific COVID-19 payment holidays do not go on your credit file but lenders can factor them in to lending decisions after spotting it via your application forms or your payment history. However, once the payment holiday is over and you’ve made a few repayments, there should not be much of an impact.

So, if you don’t really need a three month payment holiday, don’t take it. However, if you’re struggling financially, do apply now and get the help you need.

Remember you only have a few short days left in which to submit your claim.