HMRC is expecting around 12.2 million people to submit tax returns this year, up from around 12.1 million last year - meaning there'll be around 100,000 taxpayers who could be filing for the first time.
Here, Which? goes through eight mistakes first-time filers will want to avoid when submitting their tax return - and explains what you should do instead.
This process can take a good couple of weeks, so get started as soon as possible.
In order to file your return, you must have applied for and received your . It can take around 10 days for it to arrive through the post - and another 10 days for your vital activation code that will enable you to get into your online tax account.
HMRC will sometimes give an extended deadline of three months to send your return from when you register, but if it doesn't you may get a fine - as well as separate charges if you're late paying the tax you owe.
However, the tax authority is waiving late filing charges for 2020-21 returns in February - but 2.75% interest will still be charged on the unpaid tax from 1 February.
In particular, anyone who wants to pay by direct debit for the first time may find it takes up to five working days to go through - meaning the payment would need to be set up almost a week before the deadline.
You must include all types of income on your tax return, as it has a bearing on the rate of tax you need to pay for things like capital gains tax and dividend tax.
In addition to what you've earned from employment or self-employment, you'll also need to declare money earned through:
In addition, you'll need to declare any funds received from the self-employed income support scheme, as well as 'donations' from sites like Patreon and Twitch.
If you receive child benefit and you or your partner earn £50,000 or more, you might have taxes to pay.
The high-income child benefit charge equates to 1% of the child benefit paid for every £100 of income between £50,000 and £60,000.
There are two types of accounting methods you can choose from - 'cash basis' or 'traditional accounting'.
Cash basis is when you record income and outgoings that have actually entered or left your account. This tends to be more suited to sole traders or small businesses, as you don't have to pay tax on cash that you haven't received yet.
Traditional accounting is when you record money that's been invoiced - so even if funds haven't actually been paid into your account yet, you'd report it as though they had.
This method of accounting is more suited to larger, more complex businesses.
Make sure you're clued up about tax-free allowances - some only apply to people with certain circumstances, and not all of them will be applied to your income automatically.
For instance, you might choose to apply the £1,000 trading allowance to income earned from activities such as selling items on eBay; similarly, there's the £1,000 property allowance that can be applied to money earned from your home. You'll have to opt in to use these allowances on your tax return.
The money you've spent for work purposes may be claimed as an expense to reduce your tax bill.
If you are an employed worker you can get tax relief on your expenses, as long as you haven't been reimbursed by your employer.
If you're self-employed you can deduct the expenses from your profits, reducing your tax bill. You can make additional claims, such as for money spent to run business premises, and expenses arising from your employees.
Note that you can't apply expenses for trading or property income if you've already applied the trading or property allowances.
After you've filed your return, you must keep your records in case HMRC asks for proof of what you've included on your tax return.
Records must be kept for at least five years from the 31 January following the relevant tax year (so, 2020-21 records should be kept until at least 31 January 2027).
However, HMRC can open investigations into fraud up to 20 years after a tax return is filed, so you might want to hang on to your records for longer.
It can really pay to file your tax return early; not only can you avoid any rushed mistakes, but you can work out how much tax you owe way ahead of the payment deadline.
Come 31 January, this will mean paying the tax you owe for the tax year that's ended, plus half of the estimated tax bill for the current tax year.
You'll then pay the second half of the estimated tax on 31 July. Depending on how your tax return matches your tax estimate, the following January might see you paying more tax, or you might be due a refund.
It's easy to use, jargon-free, and even suggests expenses and allowances you might have forgotten.
When you're finished, you can even use the tool to submit your tax return directly to HMRC.