SELF-ASSESSMENT 2022: TAX DOESN’T HAVE TO BE TAXING… BUT IT MIGHT BE MORE COMPLICATED

It’s self-assessment season again, and despite the well-worn adage, “tax doesn’t have to be taxing”, this year it might well be more complicated.

In another year characterised by disruption, I expect many self-assessment taxpayers are facing new questions around their taxable income for the 2020/2021 financial year, making this year’s tax return more challenging than ever. Those who were furloughed from their regular employment or took on additional work during the pandemic might have a particularly difficult time working out what they owe HMRC, along with the additional pressures from lack of resources or financial agreements remaining outstanding due to the pandemic.

Fortunately, earlier this month the Government announced a sabbatical on late submission and payment fines to ease the pressure on individuals completing and filing their tax returns. Although the official deadline to file and pay remains 31^st January 2022, fines for late filing and payment have been waived, giving taxpayers more time to get their finances in order:

• Late penalties can be avoided if tax returns are filed by 28^th February 2022
• Late payment penalties will not be incurred if people pay their tax in full, or set up a ‘Time to Pay’ arrangement by 1^st April 2022

This sabbatical on fines will no doubt ease the pressure for millions of self-assessment taxpayers, though it’s encouraging to note that according to Government figures, over half of the 12.2 million eligible taxpayers have already submitted their returns.

Extra support

We understand that self-assessments can be complicated, and the financial implications of any subsequent investigation can be massive.  Arc Legal offers Tax Protection, both as part our Family Legal Protection solution, and Tradesman offerings.

Tax Protection covers the legal costs for accountants’ fees if you are subject to an HM Revenue & Customs full enquiry into your personal Income Tax position. The cover can be included as part of an overall legal protection policy, on its own as a group affinity benefit, or is available from some providers via accountancy practices. Where provided as a specialist cover, it often also includes a dedicated Tax Helpline, manned by a team of accountants, offering advice on a full range of tax queries, along with access to a 24/7 Legal Assistance Helpline for advice on any personal legal matter that affects you or your family.

Richard Finan, Director of Strategic Development, Arc Legal Assistance

For further details on our products and services, please contact your Partnerships Manager or email marketing@arclegal.co.uk.