Keeping on top of your 2020 Tax Return
Time is marching on and as soon as the current lockdown arrangements end, it will nearly be Christmas!
Your 2020 Tax Return will include details of all your UK/ worldwide income which arise in the period 6 April 2019 to 5 April 2020 - just before the effects of Coronavirus really took hold.
This means that some of you may have higher tax bills due on 31 January 2021, especially if you deferred your July 2020 payment of tax on account.
Those taxpayers who may have difficulty paying their 31 January 2021 tax payment can agree more time to pay with HMRC provided the amount due is less than £30,000. Typically, HMRC may allow you a further 12 months to pay but this will depend on your personal circumstances.
If, when gathering your 2020 tax papers, you realise that your 2019 Tax Return needs amending to include income received in the year ended 5 April 2019 which has previously been omitted, the deadline for submitting an amendment is also 31 January 2021.
If you are required to pay payments on account for the 2020/21 tax year these will be based on your 2019/20 position. If your income has been impacted by Coronovirus then it may be possible to reduce these payments down.
Declaring earnings from AirBnB rentals to HMRC
In other matters, you may have seen in the press that AirBnB are releasing information to HMRC about the earnings of hosts who use the AirBnB platform to advertise their homes for rent. It is expected that HMRC will use the information provided by AirBnB for 2018/19 and 2017/18 and make contact with hosts who have not declared their rental income.
AirBnB income may be exempt under the rent a room scheme, or below the property income allowance. For others though, the income may be fully reportable and taxable; if this is the case and you have not already reported the income on your Tax Returns you should consider making a disclosure to HMRC before they approach you.
If we can assist you with the completion of your 2020 Tax Return, repair your 2019 Tax Return or help you disclose omitted income from previous years, call one of our private client specialists on 01223 810100.