Number of late self-assessment returns declining

British taxpayers are becoming more efficient at completing their tax returns, leading AAT to predict that if the current rate of decline in late returns continues, the number could reach zero by 2022.

From 2015 to 2016 there was a drop of 20,000 fewer late returns, increasing to another 30,000 fewer from 2016 to 2017. There was then an even sharper drop of 94,000 from 2017 to 2018. If the trend continues, in 2019 there could be a fall to around 600,000 late returns, around 350,000 late returns in 2020, 60,000 in 2021, and conceivably, zero late returns in 2022.

Brian Palmer, AAT Tax Policy Advisor says:

It’s excellent to see that the number of people returning their self-assessment tax returns late is going down year on year. There really is little excuse for filing a late tax return. The best advice that I can offer is that those who need to complete a self-assessment return should start working on it sooner rather than later.

By extrapolating the decline in late returns continuing at its current rate, it is possible to imagine a utopian position where the number of late returns could fall to zero within the next few years. 

The number of late returns declining is due to HMRC’s continuing efforts to make the process easier and simpler. In the longer term, the introduction of Making Tax Digital, and the discipline to file quarterly updates, could also help businesses and individuals to get in a mindset of filing on time. Especially as HMRC’s systems will inevitably send reminders to people in advance of when their return is due.

The 746,000 individuals missing the 31 January deadline in 2018 will have all risked automatic fines of £100, totalling £74.6 million for HMRC. Further penalties for late payment can also be triggered, of £10 per day after three months, up to a maximum of £900, and then further charges six and 12 months after the deadline.

AAT’s small business advice portal Informi.co.uk has three tips to help make completing a self-assessment as easy as possible, and help in avoiding any late fines:

1. Do it online

Filling in a paper return can be a longer and more laborious process. There are also shorter deadlines for paper returns. Doing it online is quicker, often more efficient, and is recommended by HMRC. 

2. Be organised

One of the easiest ways to make your tax return more simple to complete is to ensure you have all the paperwork you need, such as receipts and invoices, ready when you need it. You could do this by creating folders on your computer to saving copies of your paperwork as soon as you receive them. This way, when the time comes to submit your return you’ll have everything in one place already. 

3.  Get support from a registered bookkeeper or accountant

If you can afford it, getting a registered bookkeeper or accountant to prepare your tax return for you can leave you free to concentrate on running your business. Even if you can’t afford to have a professional prepare your return you should try to get one to look over yours after you’ve completed it but before its submitted, so they can check for mistakes.

Find more help to complete your self-assessment if you’ve left it late.