Filing a tax return is never going to be an enjoyable process (okay, there are some at Alexander who probably relish the opportunity!) but you’d think people were gluttons for punishment judging by the figures.
MILLIONS of UK taxpayers have needlessly filed tax returns this year, despite owing HM Revenue & Customs no money, it has been pointed out by the organisation’s critics.
Amazingly, almost a quarter of people submitting their returns owe less than £50 or nothing at all. Around a third of UK taxpayers have to file returns but in 16% of cases, nothing is owed, while in a further 8%, less than £50 is owed. The issue here boils down to people not being sure if they owe anything and submitting returns out of fear of upsetting the taxman.
It is currently compulsory for those who earn over £100,000 and directors of companies to file a tax return, even if there might not be any extra income to declare.
Tax returns can be useful as records to help with loan applications or other legal endeavours (and maybe some people just love practising for some future tax-return responsibilities!).
The day when the tax return process becomes purely online and synced with payslips and expenses will be a milestone for self-assessment accounting particularly. In theory, the move will abolish the problem of people filling in tax returns needlessly because the amount they owe will be calculated, although this situation is many years away.
According to a spokesperson for HMRC: “We don’t want anyone to fill in a tax return unless it’s absolutely necessary. That’s why we automatically remove 400,000 people from self-assessment every year.
“For those who do, we’ve made it easier than ever to send in a self-assessment return by bringing in short tax returns and online self-assessment, and we are taking this much further by introducing the new digital tax accounts.
“If you don’t think you need to be in self-assessment contact us, and if we agree, we’ll take you out of the system.”
You can read other information on tax returns and self-assessment here: