Self Assessment

Today HMRC has announced Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February.

More than 8.9 million customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible.

But anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February.

Taxpayers are still obliged to pay their bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities.

Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before setting up a time to pay arrangement, so HMRC is encouraging everyone to do this as soon as possible.

Self assessment tax returns- late-filing penalties

HMRC has rejected calls to reconsider automatically waiving late-filing penalties for self assessment tax returns due on 31 January, but confirmed that deadlines missed due to COVID-19 should not result in having to pay a penalty provided an appeal is made.

How will VAT change after Brexit?

Domestic VAT rules remain the same following the end of the transition period. However, VAT rules relating to imports and exports to and from the EU will change.Prior to Brexit and during the transition period, the UK was part of the EU VAT regime. This means a UK business didn’t have to register for VAT in each EU country, and instead applies a common set of rules in relation to VAT. It also means UK businesses were able to use various VAT simplifications such as distance selling thresholds and online VAT refund process.

However, as of 1 January 2021, UK businesses will treat EU countries like they already do countries outside the EU.

The VAT terminology will change accordingly. Trade with EU countries will cease to be called dispatches and acquisitions, and will instead be referred to as imports and exports – again, in line with trade with non-EU countries.

In broad terms, VAT will be payable upon import, although the UK government has introduced the postponed VAT payment system to avoid cash flow issues. This lets businesses importing goods into the UK account for the VAT on their next VAT Return, and means the goods can be released from customs without the need for VAT payment.

This means that nothing will effectively change from a cash flow point of view compared to before, although there will obviously be new administrative requirements.Read more:

https://www.sage.com/en-gb/blog/customs-and-vat-after-brexit/#vat-anchor-link