More than 11.5 million taxpayers will need to file their self-assessment tax returns by 31 January – but with three weeks until the deadline, just under half haven’t got around to it, according to HM Revenue & Customs (HMRC).
If you’re self-employed, earned money from sources other than your salary this year, or are collecting a pension, you might be required to file a tax return.
Which? explains how to make sure your tax return is filed on time and avoid a fine.
More than 5.5m yet to file tax returns
HMRC estimates that 11.5m tax returns are likely to be due by the end of this month.
You may need to submit a return if you have untaxed income, or in the following circumstances:
- you’re self-employed, a business partner, or director of a limited company
- you’re an employee or pensioner with an annual income of £100,000 or more
- you have a pre-tax investment income of £10,000 or more
- your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
- you have income from abroad that you need to pay tax on
- you were a trustee of a trust or a registered pension scheme
- you received a P800 form from HMRC saying you didn’t pay enough tax last year – and you didn’t pay what you owe through your tax code or with a voluntary payment
- you’re a ‘name’ at the Lloyd’s of London insurance market
- you’re a minister of religion
- you’re a trustee or representative of someone who has died.
At this stage, however, just 52% of eligible people – approximately 6.02m – have completed their returns and submitted them.
Of these, the vast majority of people filed online, through HMRC received 703,943 tax returns on paper (12% of the total).
This means that 5.54m are still to file their returns, with just three weeks until time runs out.
- Find out more: who should submit a tax return?
How long will my tax return take?
The amount of time it’ll take you to file your return will depend on how complicated your circumstances are, and how well you’ve kept records.
On average, people spent 3.4 hours completing their tax returns, recent Which? research found. But a small portion (9%) spend more than five hours on their paperwork.
The most time-consuming aspects were finding receipts and records, and trying to understand the HMRC forms, according to our survey respondents.
Leaving your return too late can cost you dearly. Filing any time after midnight on 31 January will earn you an automatic £100 fine, and the news gets worse the longer you leave it.
Up to three months late, you’ll pay £10 for each additional day, up to a maximum of £1,000. If you’re six months late, you could pay either £300 or a penalty of 5% of the tax due.
And after 12 months, you could be fined up to 100% of the tax due, effectively doubling your bill.
And keep in mind that the opportunity to file on paper has passed, as the deadline was 5 October 2017. You’ll need to file online, or risk being penalised for missing the paper filing deadline.
Tips for completing your tax return
You still have a few weeks before your tax return is due, but time is running out. Getting yourself organised in advance can save you time, and prevent last-minute stress.
Step one: get your documents ready
As a first step, make sure you have all your important documents in one place, which might include your P60, P11D, your PAYE notice of coding and P45.
You’ll also need receipts if you’re claiming expenses, as well as a copy of your accounts if you’re self-employed. Check HMRC guidance carefully to make sure you have everything you need.
Step two: you need a Unique Taxpayer Reference
In order to submit your tax return online, you’ll need a Unique Taxpayer Reference. This stays the same every year, but if you’ve never filed before, you’ll need to register for one – and it can take up to 10 working days to arrive in the post.
You’ll then need to apply for an activation Pin, which could take another 10 days. So if this is your first time, make sure you register as soon as possible.
If you have a UTR, but have forgotten it, check last year’s paperwork or get in contact with HMRC.
Step three: Estimate income rather than file late
You might be chasing up missing figures, but don’t risk missing the deadline.
Rather than submitting late, you’re better off estimating the figure and submitting your return, then providing HMRC with the revised figures as soon as possible afterwards.
Step four: keep paperwork
You need to keep your paperwork for a set period of time: at least 22 months from the end of the tax year if you are employed or a pensioner; and for five years and 10 months if you are self-employed or letting property.
You might also need the paperwork if you’re applying for a mortgage or loan, so it’s worth keeping in a safe place, plus it’ll make your life much easier next year.
You can find out more in our full guide to self-assessment.
Complete your tax return with Which?
Which? offers a tax calculator that makes it quick and easy to work out how much tax you owe.
You can pull together all of your income and outgoings, work out your tax liability and submit your return directly to HMRC with a click of the button.
You can see how the Which? tax calculator works in the video below. Try it for yourself at which.co.uk/taxcalculator.