One-fifth of self-employed Brits leave tax return until last minute

Saleha Riaz
·3-min read
Tax preparation app provider EY TaxChat’s survey of self-employed UK workers found that not only are a significant number leaving it to the last minute, but one in seven have missed the deadline before and incurred a fine. Photo: Getty Images
Tax preparation app provider EY TaxChat’s survey of self-employed UK workers found that not only are a significant number leaving it to the last minute, but one in seven have missed the deadline before and incurred a fine. Photo: Getty Images

Up to a fifth of self-employed UK workers – which equates to around 850,000 people — may not yet have completed their online tax return, the deadline for which is 31 January, because they hate admin and the thought of doing them fills them with dread and anxiety.

Tax preparation app provider EY TaxChat’s survey of self-employed UK workers found that not only are a significant number leaving it to the last minute, but one in seven (14%) have missed the deadline before and incurred a fine.

24% say this is because they do not have access to all the information they need until much nearer the end of the year. Other reasons included not being able to face digging out all the necessary documents (20%), hating the admin it involves (23%) and finding it boring (22%).

When thinking about the emotions that doing a tax return evokes, nearly two in five (38%) say it causes them stress, while 30% associate it with anxiety and 29% a feeling of dread.

Of those fined, the majority (70%) have had to pay the standard £100 ($135) fine, but 28% have paid more.

13% of respondents who incurred a fine claim to have paid somewhere between £501 and £5,000 due to a prolonged delay or additional interest being added, and over a quarter (29%) of late submitters said they have had to pay up to £500 more than they expected after having a tax return adjusted.

READ MORE: HMRC to waive some late tax payment fines

Mark Lee, UK EY TaxChat leader, said: “Filing a tax return is a once-a-year event that can creep up on many, including the self-employed, and often results in a rush in January to get everything done before the deadline. Large numbers don’t quite get there and end up submitting theirs late, which can be a costly – and needless – mistake.”

According to the research, a tax return takes most self-employed workers roughly four hours to complete. However, for more than one in eight (13%) it takes more than a seven-hour working day to complete.

For many, professional help is required, and more than two in five (42%) respondents have sought qualified advice. However, the survey also showed that 28% believe seeking professional support may be too expensive for them.

Lee said there are ways to make the process easier, such as starting the tax return earlier in the year to ease time pressure and seeking support from a tax professional.

“Both should make the process simpler, and support is often more affordable than many might believe. It also greatly reduces the chance of penalties for errors or late submission and in some cases will save taxpayers money as a tax adviser will ensure all reliefs and allowances are claimed appropriately,” he said.

According to the Office for National Statistics there were 4,539,000 self-employed workers in the UK between June and August 2020.

Last week the HMRC said around 55% of self-assessment customers have filed their returns, and urged others to do so by 31 January.

HMRC expects 12.1 million tax returns to be filed this year. Around 55% have already filed their returns, with more than 6.2 million choosing to submit online, which is 93% of all returns filed, it said.

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