Will you be filing your tax return this Christmas?

Sarah Coles, senior personal finance analyst at investment platform Hargreaves Lansdown, said: “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 deadline to submit your 2020/21 tax return is 31 January 2022, and if you fail to get it in by this date, you risk being slapped with a £100 fine. More than 12m people in the UK must complete tax returns, but there are steps you can take to make the process a bit less painful.

1) Set up your online account if you haven’t already
The deadline for filing a paper return has passed as it was on 31 October 2021, so if you haven’t yet sent in a return, you’ll need to submit it online. You do this using the Government Gateway, which is where access online government services, such as filing your tax return or claiming tax credits. You’ll need your User ID and password to log on to the Government Gateway, but if you haven’t yet registered for the service, perhaps because it’s your first time filing a tax return, you can set up an account here.

2) Prepare your paperwork
Getting together all the paperwork you’ll need to complete your tax return in advance can make filling in your form much quicker and easier. The paperwork you’ll need with depend on your individual circumstance.

For example, if you’re self-employed, you’ll need your accounts for the year, along with any invoices and receipts for expenses you want to claim back.

If you’re employed, however, you’ll need a P60 form showing your earnings for the year and a P11D form showing your company benefits for the year, both of which should have been given to you by your employer. You’ll also need payslips and details of any share options you might have.

If you’re an investor, you’ll need any dividend vouchers, as well as interest certificates from banks or building societies.
Landlords must also complete a tax return and will need rent records along with details of any allowable expenses, such as maintenance and repairs.

3) If you think you’re going to struggle to pay your tax bill
If you don’t think you’re going to be able to pay the tax you owe at the end of January, you may be able to use HMRC’s ‘Time to Pay’ service so you can spread the cost over the next 12 months. The online service can be used by anyone with tax bills up to £30,000 and will come up with monthly payment plan based on how much tax is owed and the length of time needed to pay.

Set up your own Time to Pay arrangement if you think you’re going to need more time to pay. According to HMRC, last year, 123,000 customers used self-serve Time to Pay to spread the cost of their 2019/ 2020 tax bill, worth a combined £46 million.

If you can’t make your own Time to Pay Arrangement online, for example because you owe more than £30,000 or need longer to pay, get in touch with the Self Assessment Payment Helpline on 0300 200 3822.