The January blues really aren’t helped by the annual tax returns deadline today – but filing your return is rarely as painful as the dread that precedes it.
While Which? estimates that Britons will collectively rack up 25million hours filling in their tax returns this year, the good news is that, on average, you are looking at a more manageable two hours and 12 minutes per person. That means you’re not too late. Yet.
Of course, getting started as early as you can is the best way to avoid stress and some potentially hefty penalties further down the line for filing late.
HMRC’s decision to waive penalties on late tax returns until February 28 and late tax payments until April 1 may have come as a relief to the many who are yet to file.
But I’d urge you to hit today’s deadline if you can, as you can still be charged 2.75% interest on tax that hasn’t been paid by this date.
Filing after February 28 will land late taxpayers with an immediate £100 fine, and leaving it longer will cost even more: filing three months late could leave you with an extra £1,000 to pay on top of your bill.
HMRC will accept some ‘reasonable excuses’ for missing the deadline,
but these have to be significant unforeseen events that would feasibly have prevented you from submitting your return on time.
‘My hamster ate the post’ or ‘my mother-in-law put a curse on me’ (yes, these are genuine excuses HMRC has received in the past) just won’t cut it.
If you’re not sure whether you need to submit a return, you can double check at gov.uk/check-if-you-need-tax-return.
You can streamline the self-assessment process by tracking down all of the documents you need beforehand.
To file online, you’ll need your National Insurance number and Unique Taxpayer Reference (UTR) – a ten-digit number sent to you automatically when you first register for self-assessment (if you can’t find it, contact HMRC on 0300 200 3310).
Then, depending on your circumstances and the types of income you’ve received, you will also need supporting documents, such as invoices and bank statements.
Don’t forget to claim any expenses you are entitled to, or you will end up paying a higher bill than necessary.
If you’re self-employed, this can include stationery, tools, travel and accommodation for business trips.
HMRC doesn’t expect you to provide proof of expenses when you submit your tax return, but you should keep hold of these records and receipts in case you’re later asked to show them.
If you are chasing up any missing figures, you can still submit your return – just make clear that some are estimations, and you can then amend them at a later date if need be.
To help you navigate what can be a confusing process, Which?’s easy-to-use online tax calculator breaks down technical tax terms into jargon-free explanations and offers personalised tax tips, including suggestions for expenses and allowances you might have missed.
If you can’t pay your tax in full by the deadline, you’ve got the option of spreading eligible payments out via HMRC’s Time to Pay arrangement. However, doing so means you will be charged interest.
Finally, be wary of sending money into the wrong hands. HMRC is a favourite target for impersonation scammers, who try to trick you into handing over your details with promises of tax rebates or threats relating to unpaid tax bills.
These could come via email, phone or text, with copycat websites also set up to fool you. The genuine government website where you can complete your tax return securely is gov.uk/hmrc.
The Which? tax calculator can be found at which.co.uk/tax-calculator. Fees apply: £10 for Which? members and £49 for non-members. For free money-saving tips and consumer rights advice, visit which.co.uk
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