QUESTION: I usually file my tax return online in January each year but was thinking of filing it early. Can I complete a paper version and send it to HMRC?
ANSWER: With the October 31 deadline for filing personal tax returns on paper fast approaching, many UK taxpayers are gearing up to submit their returns to HM Revenue and Customs (HMRC). While online filing has become increasingly popular for its speed and convenience, a significant number of people still opt for the traditional method of filing on paper.
Filing a paper tax return remains a valid option in the UK, but it requires a methodical approach to avoid errors and penalties. Taxpayers choosing this route must first request the appropriate forms from HMRC, usually available from April each year. Once received, they need to fill out these forms carefully, detailing their income, expenses, deductions, and any other relevant financial information.
For business owners, it’s essential to retain these records for at least five years, while non-business taxpayers should keep them for two years from 31 January following the end of the tax year.
The forms must be signed, dated, and submitted to HMRC by October 31 to meet the deadline. HMRC will then calculate the tax liability based on the information provided. Taxpayers are advised to review these calculations carefully and contact HMRC if there are any discrepancies.
For those who miss the October 31 deadline for paper filing, there are still options available to avoid the consequences of late submission. The most straightforward solution is to switch to online filing, which has a more generous deadline of January 31. This gives taxpayers an additional three months to complete and submit their tax returns, reducing the risk of fines.
However, if you miss the January online filing deadline as well, penalties will start to accumulate. The initial fine is £100 for filing up to three months late, regardless of whether you owe any tax. Beyond three months, the penalties can increase substantially and can include daily penalties and a tax geared penalty based on the amount of tax you owe.
Interest charges also accrue on any unpaid tax from the due date until full payment is made, making it essential to act promptly.
While paper filing is a valid choice, HMRC strongly encourages taxpayers to file online whenever possible. Online filing offers several advantages, including immediate confirmation of receipt, faster processing times, and access to HMRC’s built-in error-checking tools, which help reduce the chances of mistakes.
In addition, online filing gives you until January 31 to submit your tax return, providing much-needed flexibility and reducing the pressure to meet the earlier paper deadline. With increasing digital support and security measures in place, the online system is designed to make the tax filing process as straightforward and secure as possible.
As the October deadline for paper tax returns draws near, it’s crucial for taxpayers to act swiftly and ensure their returns are submitted accurately and on time. For those who miss the deadline, filing online by January 31 remains a viable option, potentially saving them from significant penalties.
Whether you choose paper or digital filing, being proactive and informed is key to staying on the right side of HMRC this tax season.
- Feargal McCormack (feargal.mccormack@aabgroup.com) is managing partner at AAB Group Accountants Limited (www.aabgroup.com). The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.
