In most cases, the statutory filing date for a Corporation Tax return is twelve months after the end of the relevant accounting period.

HMRC considers reasonable excuse to be something that stops a company from meeting a tax obligation despite them having taken reasonable care to meet that obligation. HMRC will consider what a reasonable person, who wanted to meet their obligation, would have done in the same circumstances.

Whether a company has a reasonable excuse will depend on the circumstances in which the failure occurred. What is a reasonable excuse for one company may not be a reasonable excuse for another company.

The company must remedy the failure to file as soon as it can reasonably be expected to do so after the excuse has ended.

HMRC have published examples off what might be considered a reasonable excuse. They include:

• One director runs the company, and he (or an immediate family member) dies or suffers a sudden and serious illness close to the filing date. Alternatively, the director has a prolonged and serious illness throughout much of the return period.
• Unavoidable and unexpected absence abroad of the responsible director close to the deadline because of business commitments or domestic emergency.
• Accidental destruction of the records through fire or flood.

There are still two ways to submit your self-assessment tax return.

Most taxpayers chose to file electronically, and if we file your tax return, this is the way we would file on your behalf. If you do file electronically, the filing deadline for the 2020-21 tax year is 31 January 2022.

But there are still taxpayers that prefer to fill out a paper return. If this is your preference, please note that if your 2020-21 self-assessment tax return is still not filed, you have missed the filing deadline (31 October 2021). You have two options, to minimise penalties: complete and submit the outstanding return asap or complete and submit the return online. If you need help switching to the electronic filing option, please call, we can help.

In a recent press release, HMRC were at pains to remind taxpayers that this year, they will also have to declare if they received any grants or payments from COVID-19 support schemes up to 5 April 2021. These grants are taxable, including:

• Self-Employment Income Support Scheme,
• Coronavirus Job Retention Scheme,
• other COVID-19 grants and support payments such as self-isolation payments, local authority grants and those for the Eat Out to Help Out scheme.

The £500 one-off payment for working households receiving tax credits should not be reported in self-assessment.

The temporary reduced rate of VAT (5%), introduced to assist qualifying hospitality trades disrupted by COVID lockdown measures, was increased to 12.5% on 1 October 2021. Based on present information, from 31 March 2022, this 12.5% rate will revert to the 20% standard rate.

Businesses that manage their own accounts software will need to change the VAT settings to include the new 12.5% rate, and make sure that this new rate is applied to all relevant taxable sales from 1 October 2021, in place of the temporary 5% rate.

Affected businesses will also need to consider the effects of this change on their selling prices to customers.

If you decide to maintain the VAT inclusive price that you charged when the 5% VAT rate applied, the increase in VAT to 12.5% will lower your profit margin.

If you decide to pass on the VAT increase to your customers, you may experience a drop in demand for your services.

If you are unsure which way to proceed, please call. We can help you consider your options and, if required, change your accounts software to include the new 12.5% rate.