Number of late self-assessment returns declining

With the self-assessment deadline date getting closer, it seems that British taxpayers are becoming more efficient at completing their tax returns.

Findings from the Association of Accounting Technicians (ATT) show that 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.

According to the AAT, if this 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, commented, “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.”

There is a wide range of support and guidance available on the government website for every stage of the tax return process if you still need help completing your self-assessment.

People need to complete a tax return if they:

• Earned more than £2,500 from renting out property
• Or their partner received Child Benefit and either of them had an annual income of more than £50,000
• Received more than £2,500 in other untaxed income, for example from tips or commission
• Are self-employed sole traders
• Are employees claiming expenses in excess of £2,500
• Have an annual income over £100,000
• Earned income from abroad that they need to pay tax on

The penalties for late tax returns:

• An initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
• After 3 months, additional daily penalties of £10 per day, up to a maximum of £900
• After 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
• After 12 months, another 5% or £300 charge, whichever is greater 

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