Income tax

Online tax returns

By Ian Robinson

Article 6 of 10

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Online tax returns

An online tax return can be submitted via the HMRC website. 

The process is similar to filling in a paper return but offers several advantages.

1. Online tax return – extended deadline

The most obvious advantage in filing online is the extended deadline – you have until 31 January 2017 to submit your return, giving you three extra months to gather information. 

If you file online and submitted your tax return by 30 December, provided the tax you owe is less than £2,000 you can opt for this to be collected through PAYE.

2. Automatic online tax calculation and faster repayments 

Apart from the longer deadline, the two main advantages of submitting your tax return online are that your tax is calculated automatically as you fill in the tax return and you get a faster repayment if HMRC owes you money. 

3. Instant online confirmation from HMRC

Once you’ve submitted your tax return online, you’ll receive an on-screen confirmation message, together with a reference number from HMRC. 

This may give you greater peace of mind than entrusting your paper tax return to the postal system.

4. Personalised tax forms

HMRC's online tax-return program reacts to the answers you give as you fill it in – removing irrelevant sections, for example. If you fill in a paper tax return, there are likely to be sections you have to miss out deliberately, whereas these will simply 'disappear' if you decide to file online.

HMRC's system will also pre-fill your online tax return with information already held on you, such as your address and National Insurance number. 

When filing online, you can also save your tax return at any time, coming back to it later if you don’t have time to fill in everything in one sitting. If you make an obvious mistake when filling in an online tax return, HMRC's software should also highlight this.

Find out more: If you need more help with tax, or any other aspect of your finances, sign up to a £1 trial with Which? and you can speak to a member of our Money Helpline team to get individual guidance.

Online tax returns – how to register

If you haven’t submitted an online tax return before, you need to register in advance.

To register, visit the HMRC website. Click on the ‘Self-Assessment’ option under the 'Do it online’ heading. If you’re a new user, click on the ‘Register’ button, then select ‘Individual’, followed by ‘Self-Assessment (SA)’.

You’ll set up a user ID and password, and then receive an activation code by post, which allows you to file online. The code can take up to seven days to arrive, so you need to make sure you register well in advance of the 31 January deadline.

Once you have received an activation code, you must activate your online HRMC account within 28 days of the date shown on the letter sent to you – otherwise the code will expire and you'll need to request another.

If you've lost your log-in details, it is still possible to log on however, using HMRC's new digital verification service. This uses third parties, such as Experian or the Post Office to check your ID. It also gives you access to a digital tax account.     

Online tax returns – HMRC's service

HMRC's online service allows users to submit details of their income from: 

  • employment
  • self-employment
  • individual partnership – to report your share of a partnership's profit or loss
  • land and property
  • capital gains
  • foreign income.

Online tax returns – how to log on

Once you have logged on to your online tax return, there are five steps to follow:

  • Check your personal details.
  • Tailor the return – choose to fill in all the sections that fit your circumstances.
  • Fill in the figures on your return. The online program includes handy reminders about where you can find the information to fill in the current section (eg your P11D, P60 or payslips).
  • Check the return – make sure everything is correct and complete.
  • Submit your return. When you do, you will get an on-screen confirmation and code number.

Online tax returns – meeting the self-assessment deadline

A common reason for missing the tax-return deadline is a missing figure you are waiting for. Rather than let this hold things up, it is better to submit an estimated figure (declared as such) and let HMRC have a revised one later if necessary.

There are very few excuses that HMRC will accept for late filing. Those that are listed include a life-threatening illness or the recent death of a partner. Leaving it too late to get an activation code is not good enough, although you can appeal if you apply in time and it fails to arrive.

If you do miss the online deadline and want to appeal, write to HMRC as soon as possible.