While HMRC announced it is waiving its £100 penalty for late tax returns during February, the official 2019-20 tax return filing date is still today (31 January) – and it’s still the tax payment deadline.
This means that any unpaid tax that’s due on 31 January will be charged 2.6% interest, which is why HMRC is encouraging anyone who is able to file their tax return by the official deadline should do so.
On 25 January, HMRC said it was still waiting for 3.2m tax return submissions out of the 12.1m it is expecting.
The tax authority revealed that last year 702,171 self-assessors left it until 31 January to file their tax return, and the peak hour for filing was between 4-4:59pm when 56,969 submissions were received.
Here, Which? provides some tips on how to file your tax return quickly, and avoid getting a late fine.
1. Get your paperwork together
Hunting through letters and emails might not feel like you’re getting the job done, but one of the best ways to cut your tax return time is to get all of your documents ready beforehand. That way, you can simply fill in the information as you go, without having to pause at each section to look for figures.
What you’ll need will depend on your circumstances, but everyone will need their include National Insurance number and UTR number to start. Then, depending on your sources of income, you’ll need things like your P60 and/or P45, invoices, receipts, student loan statements, tenancy agreements and bank statements.
2. Check your tax account access
If you’re filing your tax return online through the gov.uk website, you’ll need to login to your personal tax account – and there are several bits of information you’ll need to do this.
Firstly, you’ll need your government gateway login details – these include your government gateway user ID, which is usually a series of 12 numbers.
This should get emailed to you when you first register (searching for ‘government gateway user ID’ will usually find it) – but if you no longer have this email and you’ve forgotten the number, you can ask for it to be recovered and sent to you.
You’ll also need your password – if you’ve forgotten this, you can enter your user ID and it can be reset via a link to your associated email address.
If you’ve lost both your user ID and password, it’s possible to find them both, but you’ll need to answer more questions about yourself and the process may take a while.
Your UTR number is a 10-digit number that sometimes ends with a ‘K’ – this stays with you for life, and must be used for all tax returns. It should be on all self-assessment correspondence from HMRC, but if you can’t find it there’s a separate process for finding it.
3. Estimate any missing figures
If, after gathering all of your information, you find that some figures are missing, you don’t have to delay filing your tax return to wait for them.
Instead, you can submit estimated or provisional figures, and update your return when you receive the accurate information – but you should indicate to HMRC if you are doing this.
The figures you submit should be your best estimate, as HMRC may charge fines if it believes your figures are deliberately misleading.
4. Don’t panic over lost receipts
If you’re having trouble finding receipts for some of the expenses you want to claim, there are ways around it.
Instead, consider whether you have other means of proving what you’ve spent or received – will it show up on a bank statement instead, or in an email confirmation?
For some types of expenses, it’s possible to claim a flat-rate where no receipts or proof of expenditure is needed. This is the case for things like claiming mileage for business travel, expenses to cover utilities if you’re working from home, or costs for maintaining a work uniform.
- Find out more: tax-deductible expenses
5. Brush up on your tax allowances
It’s good to be aware of the allowances for the 2019-20 tax year, as these will affect how much tax you pay.
Our range of guides can help you get a handle on what can be applied to your income:
- Tax-free income and allowances: this overview can tell you how much you can earn before paying tax
- Tax-deductible expenses: how to claim tax relief on your work costs if you’re employed
- Self-employed capital allowances: how some investments made for your business are taxed
- Capital gains tax thresholds and rates: what you’ll pay if you sell a valuable asset for a profit
- Tax on property and rental income: everything landlords need to know about income tax
- Personal savings allowance and tax on savings interest: find out how much personal savings allowance you’re entitled to
- Dividend tax calculator: get an indication of how much tax you owe from dividend income with our 2019-20 calculator.
6. Decide how to pay your tax bill
Your tax bill for 2019-20 must be paid by 31 January 2021, and those who pay tax by payments on account will also have to make the first payment for half of their estimated tax for 2020-21.
If you’ve already made two payments on account for 2019-20, you may be entitled to a refund if you’ve paid too much tax, or you could have to make a balancing payment if you haven’t paid enough.
Those who deferred July 2020’s payment on account – which was allowed as part of the government’s financial measures to support those who’d been affected by the coronavirus pandemic – will have to pay today.
If you’re unable to pay the tax you owe, it may be possible to apply for HMRC’s Time to Pay arrangement, which spreads the tax payments across 12 months until January 2022 – however, you must have submitted your 2019-20 tax return to apply for it.
Check gov.uk for the available options if you’re struggling to pay what you owe to HMRC.
7. Consider using an online tool
You can submit your self-assessment tax return through the government website, but some online tools could also help with the process.
Some online tools offer extra tips and advice while you’re filing – for instance, suggesting allowances that you might have forgotten about.
The Which? tax calculator allows you to tot up your tax bill and send your return directly to HMRC.
Last year, research from GoSimpleTax – our partners on the calculator – found that its users took an average of 63 minutes and 21 seconds to complete their tax return, from start to finish.
What happens if your tax return is late?
HMRC recently announced that it would be waiving the £100 late filing fine throughout February for those who miss the 31 January deadline.
However, if you fail to submit your tax return by midnight on 28 February 2021, the late penalties will kick in as usual. So, if your submission is dated from 1 March onwards, you may receive a £100 fine on the spot.
From the first day you’re late, the charges will continue to rack up:
- Up to three months late: £10 each day (capped at 90 days), in addition to the initial £100 fine
- Six months late: a charge of £300 or 5% of tax owed (whichever is bigger), plus the fines above
- 12 months late: another charge of £300 or 5% of tax owed, plus the fines above. In some extreme cases, you could be charged up to 100% of the tax owed, in addition to the other charges.
These fines may be waived if HMRC considers you to have a ‘reasonable excuse’ for being late.
This year, reasons related to the coronavirus pandemic may be considered to be reasonable, but you must be able to explain why any event or circumstance meant you were unable to reach the deadline.
Typical examples of acceptable ‘reasonable excuses’ include the death of a partner, an unexpected hospital stay and a fire that prevented a tax return being filed.
- Find out more: late tax returns and penalties for mistakes