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All I want for Christmas is a completed tax return

HMRC Letter
HMRC Letter
  • Last Christmas, 31,400 customers completed tax returns between 24 and 26 December. That included 20,200 on Christmas Eve and 2,700 on Christmas Day.
  • The peak time for completing tax returns on Christmas Day was 2pm-3pm, when over 200 people filed returns.
  • More than 10.7 million people filed by 31 January this year, and for the remaining 1.8 million, HMRC extended the deadline to the end of February.
  • Eventually, 123,000 customers used self-serve Time to Pay to spread the cost of their 2019/20 tax bills.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown:

“There’s nothing like waking early on Christmas morning and rushing downstairs to open your online tax return…

Surprisingly, that’s how 2,700 people chose to celebrate Christmas last year. Unfortunately, by the time the usual deadline rolled around at the end of January, 1.8 million people still hadn’t got around to it. So while you might have something more fun planned for the big day, it’s worth making the most of your free time over the festive break to get your tax return out of the way.

The impact of the pandemic meant that last year was incredibly difficult for millions of people completing tax returns. There were so many still outstanding by the end of January that HMRC gave people until the end of February to submit their return without a late payment penalty – although they did have to pay interest. This year it’s unlikely to offer the same leniency, so we need to get cracking.

If you’re putting it off because you’re not sure you can afford to pay, the Time to Pay arrangement will let you spread the bill over the next 12 months, as long as you file the tax return itself, have less than £30,000 outstanding, and don’t wait more than 60 days beyond the payment deadline before you apply to spread your payments.

If you’re putting it off because you can’t face the paperwork, then it’s worth considering whether you can squeeze it in between The Great Escape and It’s a Wonderful Life over the festive break, so you can see in the New Year with a clear conscience – instead of the guilt pangs and nagging worry that come with leaving everything to the last minute.”

5 tricks to make your tax return simpler

  1. Check you can get into the system in advance

Before you do anything else, sign into the Government Gateway. If you’re doing it online for the first time, you’ll need to sign up, and wait up to seven days for your code to arrive. If you’ve used the system before, sign in now and check you haven’t forgotten your log in details.

  1. Spend some time on your preparations first

If you’re not great at filing, don’t try to do everything at once: day one should be about tracking down paperwork, and ordering copies of anything you can’t find. This includes details of interest on savings accounts and dividends on shares outside an ISA, pension statements, plus proof of any employment income and benefits. If you work for yourself, you’ll want bank statements, sales invoices, receipts for expenses and paying-in books. If you received income from letting property, you need letting agreements, and bills for expenses and management fees.

  1. Make sure you’re claiming for everything you can

Check you’re claiming for all the reliefs and exemptions available to you. This includes pension tax relief and gift aid for higher rate taxpayers. If it seems like a lot of bother to claim for something, check if there’s a simpler option. If, for example, you are self-employed and work from home, you can do the calculations and count some of your household bills as expenses. Alternatively you can just use the flat rate of £10 a month for 25-50 hours a month, £18 for 51-100 hours, and £26 for 101 hours or more.

  1. If in doubt, get help

There’s loads of great information on the HMRC website, which has really improved in recent years. You can find the answer to almost any question that’s likely to crop up. There are also plenty of guides and videos offering tips to save you time and money. https://www.gov.uk/guidance/help-and-support-for-self-assessment

If you can’t find what you’re looking for, then you can phone the self-assessment helpline. Unfortunately, the closer you get to the 31 January deadline, the busier the helplines get.

  1. If you’re going to need an accountant, get a move on

If you already know that nothing will persuade you to touch your tax return over Christmas, be honest with yourself about whether you’re going to need an accountant to sort it for you, and contact them before the break. Don’t leave it until January, when accountants are snowed under, and many won’t have the time to take new clients on.

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