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Considering the taxation impact of Coronavirus
By the nature of the name, Covid-19, it means that there are other strands of Coronavirus that we have encountered before.
However, Covid-19 has had a fundamental and immediate effect on our lives and the longer-term effects to our economy are still to be understood.
Although, understandably, tax may not be at the forefront of everyone’s mind at this time, I would mention a few points which could be helpful.
Self-assessment and payments on account
HM Revenue & Customs (HMRC) have stated that the July 2020 payments on account can be deferred for all taxpayers. If you choose to defer the payment, it will be due in January 2021, along with any balancing payment for 2019/20 and, potentially, the first payment on account for 2020/21. The 2020/21 payment on account can be reduced if your income for the tax year is expected to be less.
We would recommend completing Tax Returns as soon as possible rather than waiting until closer to the 31 January deadline. By filing early, you will have
certainty of your tax liabilities and will receive any repayment sooner. The HMRC enquiry window of one year also ends sooner.
Registering as self-employed
In previous recessions there was a notable increase in people turning to self-employment to replace a lost job or to produce an additional income. If you decide to become self-employed, you will need to complete a Tax Return if your trading income exceeds £1,000. You can register as self-employed on the HMRC website. The registration deadline for 2020/21 is 5th October 2021 otherwise a penalty could be issued.
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