With the Self Assessment deadline looming, many self-employed individuals who have encountered a difficult year due to the COVID-19 Pandemic have been offered a reprieve.
In addition to the continuation of government support available under the Self-Employment Income Support Scheme (SEISS), HMRC is also offering to make things easier for those working for themselves.
HMRC Offers Self-Employed Individuals the Chance to Spread Out Their Tax Payments
If you know that you cannot pay the full amount of tax due in your Self Assessment by the deadline of the 31st of January, HMRC is allowing individuals to go online and set up a payment plan to spread out what you owe over several months.
However, in order to benefit from this and pay what you owe in instalments, you will need to set up your own account with HMRC. It’s important to note that if you do not already have an account with HMRC, it can take up to two weeks to set up in what is the busiest time of the year.
To register yourself to start the process visit the HRMC website https://www.gov.uk/log-in-register-hmrc-onlineservices/register
Step-by-Step Guide to Signing Up for an HMRC Account Online
Once you arrive at the HMRC site, follow the below steps to get yourself set up with an HMRC account. Johnston Wood Roach have produced a step by step guide on how to create your own account with HMRC available here.
Step One: First, click on the link labelled want a personal tax account. Once you arrive at the next page, click Start now.
Step Two: If you do not already have a personal tax government gateway account, select create an account.
Step Three: Select a method to prove your identity. If you choose Government Gateway, you will need a copy of your 2020 P60 and passport to hand.
Step Four: Create your sign-in details and enter your email address.
Step Five: Enter the confirmation code sent to your email.
Step Six: Confirm your password and memorable word. HMRC will send your 12-digit Government Gateway ID to the email address provided. You will also need to provide a mobile phone number in order to receive a 6-digit code each time you log in.
Step Seven: Log in and select Self Assessment, then access Self Assessment. Here you will need your UTR number and NI number. The UTR number is given on the previous screen, so don’t forget to make a note of it at this point.
Step eight: HMRC will then send a code in the post to activate your Self Assessment account. Once logged in, select ‘Set up a payment plan if you cannot pay in full’ and follow the on-screen instructions.
Act Fast to Avoid HMRC Self Assessment Penalties
With the 31st of January just a matter of days away, here at Johnston Wood Roach Accountants, we would strongly urge you to act now to avoid incurring penalties associated with late payments.
Many individuals maybe in a difficult financial position after the COVID-19 pandemic wreaked havoc on thousands of businesses during 2020. Thus, this is an excellent method to extend high outgoing tax payments and help with your financial position.
However, it’s only available to those with HMRC accounts, so don’t leave it any longer before signing up. Those with existing accounts should ensure that you make the first payment before the 31st of January. Otherwise, you could be on the wrong end of late-payment penalties from HMRC.
For help from experienced tax accountants to help you file your self assessment, please don’t hesitate to reach out to a member of our knowledgeable team on 02392 269977.