It seems like there is an inevitability that comes around every year and that is the mass missing of the self-assessment tax deadline.
One million people missed the deadline this year, which is slightly better than the 1.1 million who missed it the previous year.
At that rate, we only need to wait another decade for everyone to stop missing the deadline and get their taxes in order.
For those unwilling to wait that long, is there anything that can be done to make this next tax year better?
What is causing people to miss the tax deadline?
There is a lot of confusion around how to handle self-assessment taxes that leads people to avoid it until the very last minute.
In fact, in the hour before the deadline, 27,456 people filed their taxes.
The day of the deadline saw HMRC fielding 5,409 webchats and 10,483 calls, so if you were on hold during that time, then know the sheer volume of calls that you were nestled alongside.
Ultimately, this mad scramble was not enough for the one million who will now automatically be fined £100 even if they have no tax to pay.
HMRC are likely not too disheartened to pocket at least £100 million in fine money, but it is sad to see so many people suffering penalties that are entirely avoidable.
As the new tax year approaches, more work needs to be done to prevent this annual event and this will involve better educating people on their tax responsibilities.
How can taxes be handled better this year?
The real heartbreak comes from the fact that self-assessment tax returns can be filed anytime after the tax year ends.
This means that everyone who missed the deadline could have got their returns squared away in April and taken all of the stress out of the situation.
Not only does filing your taxes early allow you to not join the mass of people desperately trying to get their tax return over the line, but it also empowers you to pay your taxes at a pace that suits you.
Your tax bill will be the same whenever you file it, but filing it as soon as possible lets you spread the payments in any way so long as the total is paid by 31 January.
For instance, if you have a tax bill of £900 and you file it in April, you could pay just £100 at the start of every month rather than having to clear the whole bill in one go.
You also have the luxury of dealing with a much quieter HMRC, so you can challenge and query things as needed.
If you have moved from self-employment to full-time work, it can even be possible to get your tax bill added to your next year’s tax so it is automatically handled without your having to worry about it.
The full range of options is only possible if you have the time to explore them, so we encourage everyone to learn from this annual affair and approach tax returns in a healthier way.
If you are stressed about self-assessment, we can help you understand your position.
For sole traders, self-employed individuals and landlords earning over £50,000, the self-assessment will now be replaced by Making Tax Digital (MTD) for Income Tax.
This requires some adjustment and we can advise you on this process.
Speak to our team today to get confident with your tax obligations.
