With the tax season heating up, UK taxpayers are urged to act fast as the January 31 deadline for filing self-assessment tax returns approaches. Alastair Douglas, CEO of TotallyMoney, has emphasized the urgency, stating, "More than 12 million taxpayers will need to complete their self-assessment returns before the end of the month." With so many individuals needing to file, the risk of delays and fines increases dramatically.
Failure to submit the self-assessment by the deadline can trigger penalties, beginning with an automatic £100 fine for late filings. This penalty can rise significantly if returns aren't completed within three months. Unfortunately, this is not new; last February, HMRC reported around 1.1 million customers failed to meet the previous year's deadline. The consequences could be far worse than just monetary fines, especially with the looming threat of long wait times when contacting HMRC for assistance.
Last year alone, taxpayers spent approximately 7 million hours on hold waiting for help from HMRC, suffering through average waiting times of 27 minutes just to ask basic questions or resolve issues. Douglas cautions, "With the clock ticking, there’ll be a spike in people picking up their phones to call the HMRC helpdesk." Choosing to reach out for assistance as the deadline nears can lead to frustration, and it might be prudent to avoid this scramble altogether.
Tax filing preparation entails gathering the necessary documents before starting the process. For those self-employed or earning income from side ventures (like renting properties or selling items online), registering with HMRC for self-assessment is mandatory. The online filing system is user-friendly and guides users through various sections relevant to their situations, ensuring no detail is missed. Taxpayers should possess their P60 or P45, details of any self-employed income, bank statements for interest on savings, and proof of other earnings before beginning.
Once the return is prepared, the next step is payment. HMRC will issue tax bills to individuals after they complete their self-assessment tax return, which can be accessed through individual HMRC online accounts. There are multiple ways to pay the owed taxes, including online or telephone banking, debit or corporate credit cards, or at banks with required slips. It's wise to maintain proof of payments as feedback from HMRC may sometimes necessitate verification.
Douglas hints at the need for clarity surrounding who must file these returns: "If you’re unsure if you need to file a tax return, it’s worth double checking." Individuals who find themselves selling items on apps such as Etsy, eBay, or Vinted—or earning from investments—should be particularly vigilant. Those categorized as self-employed earning over £1,000, partners in business partnerships, and individuals with taxable incomes over £150,000 are all obliged to submit returns.
The obligation to file extends to ‘untaxed income’ sources; this can include rental income, dividends from investments, and foreign earnings. Douglas reminds taxpayers, “HMRC has created tools to help you find out where you stand.” Making use of these resources can streamline the tax filing process and actually save individuals both time and headaches as deadlines loom.
With just weeks left before the January 31 deadline, the stakes are high. Taxpayers must balance their post-holiday lifestyle with the pressing need to file their self-assessment returns—instead of procrastinating until the last minute. Taking the initiative now will not only sidestep the pitfalls of late fees but also forestall frustrating waits at HMRC’s helpdesk. Time is running short, and every taxpayer must take these obligations seriously to avoid complications down the line.
Overall, it’s clear: timely and accurate filing is of utmost importance to alleviate stress and financial repercussions. Being proactive about self-assessment tax returns may very well save time, money, and unnecessary frustration. Don’t let the deadline catch you off guard.