I need to complete a tax return for my dead mother by the 31st - HELP!

[icebearforpresident]

She died just before Christmas and today I received a tax return to complete from HMRC on her behalf. She had a job, a house she rented out and as she was a book keeper did peoples accounts for them. I have no idea what she was paid for any of this and, so far, i've not been able to find anything about it in her house or on her computer.

I've been on hold with HMRC for an hour. I have no idea where to start with anything and can't even access her bank accounts to see what she had coming in as they have been closed. She didn't, as far as I know, have an accountant and the solicitors handling her estate cant see anything from her bank accounts, they were the first people I called about this and while they will soon start to receive statements it will only be from when she died, nothing back dated.

All that aside, my only dealings with HMRC have been for tax credits, I've always been employed and have no extra income so never had to do a self assessment or tax return. I don't understand any of the forms or where to get any of the information.

Does anyone know if HMRC can use her previous returns to come up with a figure for payment or anything like that?

I’m sorry I can’t be any help but didn’t want to read and run. I’m sorry for your loss and hope you can get the help you need. I wouldn’t have a clue where to start.

They have just extended the deadline to the end of Feb so you have another month.

Sorry for your loss Which tax year is this for? If for current 2020/21 year then you have until October to complete the form. If you have access to bank statements you should be able to identify sources of income from there.

Sorry about your mum.

It is going to be an information gathering exercise, last year's tax return and her bank statements are a good start.

She will have a P60 for her job, HMRC can send out the details if you can't locate it, or ask her employer.

Does the rental property have an agent? If so they will be able to provide a summary for the tax year. If not it is back to basics to identify the rent receipts and any expense (insurance, bills, repairs, mortgage interest etc).

The self employment (bookkeeping) is a bit harder, but again you'll need to identify the income and expenditure.

HMRC has today extended the filing deadline to 28 Feb 2021, tax still has to be paid by 31 Jan but in this case it isn't actually due until a period (sorry can't remember how long without checking) after probate has been granted.

Also bear in mind that they will also require a return for 2020/21 from 6 Apr 2020 to date of death - there isn't the same time pressure on this.

Sorry for your loss

No, they can't use previous returns. HMRC will write to you with a deadline to provide the self assessment once they have been notified of her death, you won't be expected to meet the 31 January deadline. They will also help you fill out the forms and advise you if you cannot find records.

You need to speak to their bereavement team, not self assessment:
www.gov.uk/government/organisations/hm-revenue-customs/contact/bereavement-and-deceased-estate

Why would you need to file a self assessment for someone else. Wouldn't this be managed by the executors under a different regime. Maybe HMRC are not aware that she has passed away. Not an expert but I would expect this to be rolled up with probate.

Phone the tax office. Explain. They will tell you what you need to do

They know she’s passed away, I reported it to them with the ‘Tell us once’ form and the paperwork came to me as her executor.

After an hour and a half on the phone and 2 different departments, neither of which were the bereavement team 🙄, I was told that this situation has never came up before and there’s no guidance in place (bullshit!). His advice was provide as much information as I can and include a letter saying that it’s an estimate based in the information I have available. Now that I have a link to the bereavement team (thanks @orangenasturtium) I will try them tomorrow and see what they say.

Now I’ve calmed down a bit (this is the first thing that’s got me worked up about dealing with the estate), I have found contact info for mums tenant and emailed her asking her to confirm what the rent payments were, I think I know this but not certain, and I know her boss from work well, I will speak to them tomorrow and ask them to confirm her earnings for the year so far. I’m going back to her house tomorrow to hunt for paperwork/spreadsheets, she was doing self assessments for years so must have something tucked away somewhere but I’ve been up a few times getting stuff for the solicitors and not found anything yet. Definitely no bank statements around the place, she did it all online.

I'm so sorry for your loss. You need to just ask them for a big delay, as it will take awhile to sort everything out.

I’m sorry for your loss, but I don’t think hmrc can expect you to do a self assessment under these circumstances.
I think your responsibility lies solely in informing them. Email them so you have record.

Sorry for your loss.
If you are required to submit for 31 Jan, it is for income between April 2019 and April 2020. Earnings this year arent needed for another 12 months.

If all her bank statements are online you (or the executor) can get copies from the bank, they might take some time.

I had to do DH's after he died, but he died in March, so it was only that year.
Have you confirmed that 19/20 hasn't already been submitted by your mum and this isn't a demand for 20/21 (which as already mentioned has a longer timescale).

Are you sure that she hasn't already submitted her tax return for the last tax year. I would ask the bereavement team if they can check into this.

I'm sorry for your loss.

Call the bereavement team first thing in the morning. They are really helpful and sympathetic.

There is a reason they have a special bereavement team. Don't bother talking to any other team at the moment, for HMRC or anyone else. I found the bereavement teams of all the organisations I needed to deal with really very understanding and helpful, and above all clued up

Absolutely agree with PP that the bereavement team will be able to confirm whether a return has already been received up to April 2020. You will need to do the April 2020 to end of life return at some point, in order to get the estates valued for probate. You have at six months at least for that.

Even if no return has yet been received for the tax year to April 2020, It has been announced today that no fines will be levied for submissions received before end Feb 2020

While you are going through all this, don't forget to be kind to yourself and take each day as it comes. There is plenty of help out there. If you allow about three months to get all the valuations required, you will be going well.

Ask the bank to provide an extract of transactions which you can put into a spreadsheet, which will be much easier to deal with than a pile of paper transactions.

Once you demonstrate to them that you have a will and a certificate of death and that you are the executor, lots of things will be possible to make your life easier.

Anything you don't quite follow, post here and lots of people will be available to support you. All the best.

p.s. it's a timely reminder to make sure that you and your loved ones have wills and POA in place, too.

I'm sorry about your mum.

LITRG can be useful for explanations on tax stuff:

www.litrg.org.uk/tax-guides/bereavement/how-does-personal-representative-executor-deal-income-tax-and-capital-gains

Also, even if you don't make the extended deadline pp have mentioned, you can appeal late filing penalties on the basis of "reasonable excuse".

Are you in a position to engage an accountant to help you with reconstructing the numbers and dealing with HMRC? The solicitors might have contacts they could recommend if you aren't sure.

If you can obtain duplicate bank statements that's a good starting place to work out the various income sources. After someone dies most places will give you duplicate financial docs or at least confirm things in writing once you provide death certificate etc. Ime, those orgs will usually have bereavement teams too.

If you get an accountant you can authorise them to speak to HMRC (so you don't have to!) And they can advise you on how to reconstruct things, where to make estimates if need be, and then pull things together. If you do end up needing to make estimates because there are gaps they can also communicate with HMRC about that to agree the tax liability and manage any appeals.

It's a horrible time so anything that can lift the burden from you a bit... sorry if that's a bit jumbled, trying to remember what helped.

Take care

Sorry for your loss OP .

There could be two tax returns due, the letter will be about the one for the year that ended on 5 April 2020, which is normally due before the end of January, but a PP says it has been extended until the end of February. Then there is likely to be one for the current tax year, but that's not due until 5 April this year anyway and I would have thought that this would be dealt with as part of dealing with your DMs estate.
I agree that it's bollocks that this situation has not arisen before. It will happen to thousands of people every year.

However, just because a letter has been sent saying it needs to be done, doesn't mean that your mum didn't do it. DP did his tax return in April last year, because he was unemployed due to COVID, so he had the time and futiley hoped that it would make him entitled to SEISS, but it didn't of course.

I'd say slow down, breathe, and wait. You've informed them that your DM has passed away and the worst that can happen in the short term is that a small fine will be applied.

This is the worst time of year for trying to deal with the tax office, because everyone who needs to do a tax return and has had 9 months to do it, but has inexplicably left it until the last minute is now in panic mode and cluttering HMRC up with simple questions that they could have asked months ago.

I'd wait and see what the bereavement team say, and possibly leave it until next week, when the tax deadline madness has eased a little.

We have progress! I went to her house earlier and tucked away in a desk drawer found a USB stick which contains all the accounts she was working on, including her self assessments going back 10 years. Having looked through the most recent one she didn't declare any additional income beyond the rent & a pension. Looking at the other accounts on the pen drive they were for local charities, knowing mum she wouldn't have taken payment for doing charity work.

About to phone the HMRC bereavement team to speak to them but reading the letter i'm not sure what tax year we are dealing with, however it specifically asks for rental income from april-december this year so I suppose it's the 20/21 tax year, which I now have some extra time to submit so that's something.

Thanks all for the advice / calming words! It's helping!

About to phone the HMRC bereavement team to speak to them but reading the letter i'm not sure what tax year we are dealing with, however it specifically asks for rental income from april-december this year so I suppose it's the 20/21 tax year, which I now have some extra time to submit so that's something.

That sounds like they are already aware of your DM's passing. Or they are aware she is no longer working for her employer. Self assessment would be for the entire 20/21 tax year and not due yet. Who is the letter addressed to? It could be that the 31 January deadline is just a coincidence and is a deadline they have given her/you, rather than the national deadline for self assessment. Do they specify the date in the letter or were you just assuming the deadline as that is the day for self assessment returns? Don't worry either way, they will be sympathetic and I would expect them to offer an extension. Bereavement is a valid reason to request an extension from HMRC (in their guidelines).

Although they will be understanding, they aren't always efficient or know what their own guidance/procedures are, as you found out from your last conversation...

Sounds like 2019/20 is already done then OP, was it on the stick / did HMRC confirm?

Her death ended the 2020/21 tax year for her, on the date of death and it sounds like thats what the notification was for and therefore you now have some time to collate the information, plus the prior years to go on.
Whether you do this, or an accountant or solicitor if you are involving one in the estate, it is going to be cheaper and easier if you can do the basic information gathering.

I can’t believe just how helpful the bereavement team were! The guy I spoke to literally gave me the information I needed. Pension income, salary figures, tax paid on it all, everything, all i was left to confirm was the rental income which I’ve since done. They had received p45s from her employer and pension providers already.

Bearing in mind they already have this information it does pose the question why do I need to complete the return in the first place but hey, who am I to question the wisdom of HMRC?

He also confirmed that she filed her 19/20 return over the summer but not paid the bill, which is due on the 31st. I can’t afford it myself so they are sending a letter to me to pass to the solicitor with the amount owed so it can come out of the estate. There will no doubt be a charge but hoping we can get that waived given the circumstances. The form I have is for 20/21 and it’s not due until jan 31st next year (this is what I get for panicking before I finish reading the letter).

Really stupid question for you all now: I’ve started filling out the form and all the boxes where I’m entering figures have the pence boxes filled in with zeros. Does this mean I don’t need to put in the change, so instead of £100.42 I would just round it up to £141?

Thats excellent OP.

Round down income figures (£101.85 = £101).
Round up tax paid (£52.36 = £53).

I can’t believe just how helpful the bereavement team were!

So glad you, too, found them helpful. I have found the bereavement team really very knowledgable and sympathetic.

Oh and there is another good thing HMRC does for us, as @chasingsquirrels says round down income, round up tax paid.

It's all good

You do indeed have plenty of time to submit the current year's tax return. The incentive to get on with it is that it is one of the things that needs to be done, in order to get a valuation of the estate, and pay any inheritance tax due, in order to obtain probate and distribute the estate.

Oh, and they shouldn't charge interest on late payment after death, until 30 days after probate granted.

My DH's probate took a long time (>year) so his income tax was outstanding. They charged interest, I appealed and told them they couldn't, they withdrew it.

I've just found the relevant info...
Concessional dates for interest
If a taxpayer dies before a charge becomes due and the executors or administrators cannot pay the duty before they obtain probate or letters of administration, then Schedule 53, part 2, section 12 of the Finance Act 2009 applies and the relevant due date is the later of either

The normal due date
Or

30 days from grant of probate or letters of administration inclusive
In such cases the reduction of interest is treated as a statutory amendment and any interest given up is regarded as a discharge.

For more detailed information about interest charges see section ‘Interest’ (SAM60000 onwards).
www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam60000