HMRC is waiving late filing and late payment penalties for self assessment taxpayers for one month.

The measure will give those taxpayers affected by the coronavirus (COVID-19) extra time, if they need it, to complete their 2020/21 tax return and pay any tax due.

HMRC is still encouraging taxpayers to file and pay on time if they can. The tax authority also revealed of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.

The deadline to file and pay remains 31 January 2022. The penalty waivers will mean that:

• 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; and
• anyone who cannot pay their self assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April.

However, interest will be payable from 1 February.

Angela MacDonald, HMRC's Deputy Chief Executive and Second Permanent Secretary, said: 'We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19. Our decision to waive penalties for one month for self assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.'

The British Chambers of Commerce (BCC) has warned that businesses are facing 'unprecedented cost pressures', with inflation predicted to surge.

However, firms also worry that another rise in interest rates will set back the economic recovery from the pandemic. The BCC said there was already strong evidence of an economic slowdown in the final quarter of 2021 before the Bank of England (BoE) raised interest rates in December.

Then the BoE raised interest rates from 0.1% to 0.25%, but also raised their inflation forecast to 6% for 2022.

The BCC's survey showed one in four of the 5,500 firms questioned were worried about rising interest rates. Additionally, a record proportion of three in five expected their prices to increase in the next three months.

Supply chain disruption also remained a continuing theme across many sectors.

Suren Thiru, Head of Economics at the BCC, said: 'Our latest survey suggests that the UK's economic recovery slowed in the final quarter of 2021 as mounting headwinds increasingly limited the key indicators of activity.

'The persistent weakness in cash flow is troubling because it leaves businesses more exposed to the economic impact of Omicron, rising inflation and potential further restrictions.'

HMRC has revealed that 2,828 customers filed their self assessment tax return on Christmas Day, compared to 2,700 in 2020.

The most popular time on Christmas Day was between midday and 12:59pm when 227 returns were filed.

In total, more than 31,000 customers submitted their 2020/21 tax return between Christmas Eve and Boxing Day.

Christmas Eve was the busiest day of the festive period for filing with almost 20,000 returns made while Boxing Day saw a further 8,641.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'Filling in a tax return won't have been on many people's to-do lists for Christmas, but please don't leave it until the end of January either. We have videos, guidance and helpsheets to support you – just search 'self sssessment' on GOV.UK to find out more.'

The deadline for filing 2020/21 self assessment tax returns is 31 January 2021. Please contact us if you require any help completing your return before this date.

More than 440,000 small firms could be forced out of business by the late payment crisis, according to the Federation of Small Businesses (FSB).

An FSB study of more than 1,200 business owners found that close to one in three has seen late payment of invoices increase over the last three months, with a further 8% experiencing other forms of poor payment practice.

As a result, 8% of small businesses say late payments are now threatening the viability of their business. This equates to 440,000 of the estimated 5.5 million small businesses in the UK.

FSB National Chairman, Mike Cherry, said: 'After another frustrating festive season, small firms are facing flashpoint after flashpoint. Today, it's a fresh wave of admin for importers and exporters – in three months' time it will be a hike to the jobs tax that is national insurance contributions, a rise in dividend taxation, business rates bills and an increase in the national living wage.

'On top of that, operating costs are surging – many will soon be trying to strike energy deals without the clout of big corporates, or the protections afforded to consumers.'

With 2022 just around the corner, you may wish to consider creating some financial New Year's resolutions to ensure that you remain on course for a successful and profitable year ahead.

It is important to make the most of your business and personal wealth, and make sure you capitalise on any allowances and reliefs that may be available to you.

Inadequate financial planning could mean that you miss out on tax-saving opportunities, thereby failing to make the most of your wealth.

Carrying out a detailed and thorough review of your financial planning strategies will help to keep you on track to achieving your financial goals.

As your accountants, we can assist you in implementing strategies to improve your business's bottom line. We will also recommend a number of ways to minimise your tax bill.

We understand that organising your finances often poses an unwelcome burden. That is why we are on hand, helping you to manage your business and personal finances and stay on track in 2022.     

For more information on how we can assist you during 2022 and beyond, please contact us.

The deadline for submitting your 2020/21 self assessment tax return is midnight on 31 January 2022.

The only exception to this rule is if you received a notice from HMRC to make an online tax return after 31 October 2021. In this case, you have three months from the date of issue to submit your return.

Those who are late in submitting their return face a penalty of £100, even if there is no tax to pay, or if the tax has been paid on time. Additional penalties are due for continued late payments and late filing.

2,700 taxpayers filed their returns on Christmas Day in 2020, and another 8,500 submitted them on Boxing Day. HMRC said that the peak hour for filing on Christmas Day was between 2pm and 2:59pm, when 214 returns were submitted.

We can help with all aspects of self assessment, including filing returns on your behalf. Please contact us.

With the festive period underway, businesses are advised to be prepared for adverse weather conditions during the winter months.

Road accidents almost double during bad weather, so try and leave extra time for journeys. In order to avoid public liability claims, businesses are advised to keep their driveways, car parks and walkways clear. In addition, firms should mop and dry their floors if water or slush is brought indoors from outside.

Winter maintenance work on your business's heating system should be carried out as early as possible, and if the property is left vacant over the holiday period, ensure the heating is left on low to avoid burst water pipes.

Businesses are also advised to ensure that guttering is cleared of leaves and debris; make sure they have an adequate supply of grit and a shovel and brushes ready; and stay up to date with the weather forecast.

Finally, to help combat the Omicron variant of the coronavirus (COVID-19), businesses are advised to ensure employees work from home where possible.

A study carried out by insurance provider Simply Business has suggested that one in five small businesses in the UK rely on Christmas sales to survive.

The study found that 43% of the 600 businesses surveyed are still struggling to recover from the impact that the coronavirus (COVID-19) pandemic has had on their firm.

According to Simply Business, the COVID-19 pandemic has cost small and medium-sized enterprises (SMEs) over £126.6 billion in lost earnings.

For a third of SME owners, Christmas sales account for 20% of their annual revenue, the study revealed. One in four stated that they do not feel confident regarding their Christmas sales figures.Meanwhile, 52% of SMEs said they feared that future lockdowns and tighter restrictions could impact their sales.

'For many owners, they quite simply need it to be Christmas everyday if they're to continue their recovery from a devastating two years,' said Alan Thomas, CEO of Simply Business.

'They've faced the pandemic head-on, navigated supply shortages, and adapted to a new normal. They've shown resilience in abundance and done all they can to stay afloat. But without a strong Christmas trading period, one in five small businesses will permanently close in 2022.'

An agreement has been reached between the major retail banks to share services, ensuring long-term cash availability across the UK.

The collaboration, achieved through the Access to Cash Action Group (CAG), marks the beginning of a long-term commitment to ensuring widespread cash and banking access for communities where services are limited.

Cash use has been in decline in recent years – a trend accelerated and exacerbated by the coronavirus (COVID-19) pandemic – with current use 35% below pre-COVID-19 levels.

Banks and consumer groups recognise the need to ensure that consumers and small businesses who need cash can continue to withdraw and deposit it. Under the new model, any community that faces the closure of a core cash service, such as a bank branch or ATM, will have its needs independently assessed by cash machine network LINK.

LINK will then determine whether a new solution should be provided to meet that community's cash needs.

John Glen MP, Economic Secretary to the Treasury, said: 'Access to cash has ongoing importance to the daily lives of millions of people across the UK, and protecting it is a priority for myself and this government.

'Following the government's commitment to legislate, I am pleased to see firms working together to develop new initiatives to support continued access to cash. This is a great start, and I look forward to seeing the impact of industry's announcements for new and improved cash facilities in local communities across the UK.'