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Top tips for filling in your tax return

tax Senior woman working on home finance. Mature woman checking bills at home. Older woman checking pension approval certificate with laptop at home.
Slow and steady wins the race when it comes to filling in your tax return. Take your time and you are less likely to make mistakes and more likely to remember everything you can claim for. Photo: Getty (Anchiy via Getty Images)

Just over 2,800 people did their tax return on Christmas Day last year, and 227 did it at the same time as millions of us were sitting down for Christmas dinner.

And while even the most argumentative family Christmas wouldn’t tempt most of us to trade turkey for tax paperwork, you can be sure that millions more of us had our outstanding tax return nagging at the back of our mind every day until it was sent.

For over a million of us, this irritating nagging lasts the best part of a year, because in the last week of January this year, 1.5 million people still hadn’t filed. But there are some very good reasons to get cracking this side of Christmas.

Read more: 2022: Year in review

Perhaps most importantly it gives you longer to plan for your bill. The most sensible approach is to set aside money to cover your tax bill as you go along, but sometimes life gets in the way, and you reach January without having enough in the bank.

The earlier you do it before the end of January, the longer you have to find the cash to pay your bill. If this is impossible, then as long as you file the paperwork within 60 days of the deadline (and as long as you don’t owe more than £30,000), you’ll have the opportunity to use a Time-to-Pay arrangement to spread the cost of your tax bill over the following 12 months.

Read more: The true cost of Christmas revealed. And how to cut it

If you start early, it also gives you time to do some tax planning before you file. Most of what you do now will only affect your tax bill for the current tax year, but there are a handful of "carry back" opportunities to cut your bill for the year you’re filing a return for.

One of the most common is that if you give money to charity using gift aid, the charity will reclaim basic rate tax, but higher and additional rate taxpayers can claim the difference through their tax return, and you can carry back this claim. It means you can make a donation now, and include it in the tax return you’re filing. This is particularly useful if you paid a higher rate of tax last year than you do this year ⁠— because you can claim gift aid in a year when you were paying a higher rate of tax.

It also gives you a chance to check you’re claiming for all the reliefs and exemptions available to you. This includes pension tax relief 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.

Read more: How to manage Christmas debts

Even if you don’t get your tax return finished this side of the festive season, at the very least you have the chance to get everything in order, so whenever you get round to actually completing it, there aren’t any nasty snarl ups that would make you miss the deadline.

So 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 in the post. If you’ve used the system before, sign in now and check you haven’t forgotten your log in details.

If you’re not great at paperwork, don’t try to do everything at once: day one should be about tracking down everything, and ordering copies of anything you can’t find. This includes details of interest on savings accounts and dividends on shares outside an ISA, plus pension statements and 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.

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.

Read more: How to spot financial abuse and what to do about it

If you can’t find what you’re looking for, then you can phone the self-assessment helpline. The closer you get to the 31 January deadline, the busier the helplines get, so it’s worth starting that early too.

Who knows, you might find it simple and rewarding enough that you find yourself among the 66,500 people who file their tax return on the first day of the tax year. But in reality it’ll be a win if you avoid becoming one of hundreds of thousands of people panicking and rushing for the deadline in January.

Watch: How to prevent getting into debt