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1 in 5 self-employed workers have left their tax return to January

Jan 15
 
Tags: Ernst & Young LLP
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1 in 5 self-employed workers have left their tax return to...

A fifth of the UK’s self-employed workforce have not yet completed their tax return, despite the deadline being at the end of this month. That is according to EY TaxChat, which found 19 per cent of those surveyed always left it until January, 13 per cent did it in December and seven per cent filled out the paperwork in November.

The research looked to find out more about the attitude of self-employed workers to doing their tax returns. It discovered that 14 per cent have missed the deadline in the past and incurred a fine, with 70 per cent of this group being told to pay £100 and 28 per cent even more than this standard figure.

A prolonged delay in filing or interest being added to the amount they owed saw 13 per cent of those fined forking out between £501 and £5,000. Some 29 per cent of these late payers also saw their tax return adjusted, meaning they were charged as much as £500 more than they expected.

Mark Lee, UK EY TaxChat leader, said: “Filing a tax return is a once-a-year event that can creep up on many, including the self-employed, and often results in a rush in January to get everything done before the deadline. Large numbers don’t quite get there and end up submitting theirs late, which can be a costly – and needless – mistake.”

The reasons for self-employed workers putting their tax returns off varied. Some 24 per cent said they didn’t have all the information required until near the filing deadline. A further 20 per cent admitted being daunted by digging out all the documentation, 23 per cent hate admin and 22 per cent find the task boring.

Filling out a tax return was found to take between four and seven hours, making it unsurprising that 42 per cent of respondents had sought professional advice to get it done. In contrast, 28 per cent of those surveyed believe seeking qualified advice would be too expensive.

Leaving filling out a tax return to the last minute causes stress and anxiety, as well as increasing the chances of making a mistake or submitting it late. Both of these situations can lead to penalties, which the self-employed can ill-afford.

Mr Lee advised: “There are many ways for people to ease the burden. Starting your tax return earlier in the year eases time pressure, and those who find it a stressful experience could consider seeking support from a qualified tax professional. Both should make the process simpler, and support is often more affordable than many might believe.

“It also greatly reduces the chance of penalties for errors or late submission and in some cases will save taxpayers money as a tax adviser will ensure all reliefs and allowances are claimed appropriately,” he added.

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