Self Assessment: Deadline welcome but Scottish business face huge tax demand

Self-assessment deadline extension is a welcome reprieve but huge tax demand will hit businesses says ACCA Scotland

HMRC’s one-month postponement of the Self Assessment deadline to the end of February is a welcome reprieve given the current staffing absences businesses, their accountants, as well as HMRC itself, are experiencing due to the Omicron variant.

Susan Love, head of strategic engagement at ACCA Scotland, has commented: “This New Year is critical for many SMEs and individual taxpayers, who are coping with the impact of Covid-19 restrictions on festive trading as well as staff absence, and so this extra month to get organised and file their returns for 2020 / 21 is much needed at such an exceptional and turbulent time. It will also help HMRC’s resilience and hopefully its performance over this period.”

The delay gives businesses and individuals extra time, if they need it, to complete their 2020 / 21 tax return and pay any tax due. However, interest will be payable from 1 February, as usual, so businesses are reminded it is still better to pay by 31 January, if possible.

More than four million emails and SMS will be issued to self-assessment customers pointing them to guidance and support, prompting them to think about how they intend to pay their tax bill, and to seek support if they are unable to pay in full by the deadline. Following the introduction of Covid business support funds in 2020 / 21, businesses were also reminded recently by HMRC of the need to report taxable grants and payments received from Governments and local authorities during the pandemic. 

While loans such as Bounce Back Loans or CBILS do not need to be reported, many firms in Scotland will have received a Covid-related grant from an agency or local council, which will need to be included.

ACCA Scotland’s also reminding business owners of the dangers of scams at this time of the year, with nearly 800,000 tax-related scams reported in the last year. Fraudsters use Self Assessment to try and steal money or personal information from unsuspecting individuals. In the last year alone, HMRC has received nearly 360,000 bogus tax rebate referrals.

Susan Love concludes: ‘In Scotland, since the start of the pandemic in spring 2020, £4.5 billion in business support has been spent supporting firms, with many small businesses likely to have received some form of grant payment which will need to be included in returns. Small businesses should also be on their guard for scammers who seek to take advantage of them. If in doubt, accountants can offer trusted advice to manage the Self-Assessment process.’

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