Complete your tax return in eight steps and avoid a €100 fine

EMPLOYEES will race to complete their self-assessment tax returns before next week's deadline.

It is estimated that approximately 3.8 million people still have to complete their tax returns before January 31.

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HM Revenue and Customs (HMRC) expects that more than 12.1 million tax returns will be filed for the 2022 to 2023 tax year, along with any payments due.

Those who miss the self-assessment deadline face a £100 fine if their tax return is up to three months late.

After three months you also risk a fine of €10 per day, with a maximum of €900.

If you are six months late on your payments, you will be fined 5% of the tax you owe, or £300, whichever is the greater.

It is worth noting that HMRC will take into account a client's reasons for not meeting the deadline.

Anyone who provides a reasonable excuse can avoid a fine.

People should also be aware that scammers can use the deadline to trick them.

HMRC has warned that employees should never share their HMRC login details with anyone, including a tax agent if they have one.

Myrtle Lloyd, HMRC's director general of customer service, said: 'If you are a taxpayer yourself, now is the time to take action and get your tax return done.

“Once a tax return has been filed, it's easy to find out what's owed and pay online or using the HMRC app. Just search for 'pay my self-assessment' on gov.uk for more information.”

If you're having trouble completing your tax return or aren't sure where to start, we have some helpful tips for you.

Be prepared

HMRC uses the self-assessment system to collect income tax.

Tax is usually automatically withheld from wages, pensions and savings, but people and businesses with other incomes must declare this on their tax returns.

Before you can complete and submit your tax return, you will need something called a Unique Taxpayer Reference (UTR) and activation code from HMRC.

It may take a while to receive this, so if it's your first time doing a self-assessment, make sure you register online immediately and ask HMRC for advice.

To log in or register, go to the self-assessment tax return section of HMRC's website.

If you have already signed up for self-assessment, you can find your UTR in relevant letters and emails from HMRC.

HMRC will accept your payment on the date you make it, not the date it appears in the account, even on weekends.

Gather all the information and documents you need

Make sure you collect all expenses and documents related to your income.

Having these on hand will help you race through the process.

This includes your UTR and your social security number.

The form also includes bank statements and details of the year's untaxed income, where you may need to find your P60 (if you earned more than £8,500), your P11D (with information about expenses and benefits) and pay slips.

If you are self-employed, you will need an overview of your income and expenses.

You also need interest payments from banks and building societies, and information about pension contributions paid.

If you require third parties to provide you with statements and documents, you should contact them immediately as this may take some time.

fill in the form

Once you've logged in to complete your online tax return, you'll need to start checking your personal information.

You can then choose to complete the sections that suit your circumstances.

With an online tax return, HMRC's system responds to the answers you give as you enter them.

This may, for example, mean that parts that are not relevant to you are removed.

As you enter grades, the online system provides reminders about where you can find the information to complete certain sections.

As a taxpayer, you must declare everything you earned in the tax year from April 6, 2022 to April 5, 2023.

This includes income from work, self-employment, income from real estate and interest and profit on your savings and investments.

Don't forget to also claim any deductions you're entitled to, including donations on your charitable contributions and zoo and museum membership fees.

If you are a member of a professional organization that is necessary for your employment, you can count the costs of the subscription as a deductible item.

Self-employed people can also reclaim the operating costs of a car, but not the purchase costs.

Your tax is calculated automatically as you complete your tax return.

Please take the time and double-check your return

Once you've filled in the blank fields, check all your numbers thoroughly before hitting submit.

When you file your tax return online, you can save it at any time. So if you need to check your numbers, do so.

Once you are satisfied that everything is correct, you can press send.

If you need to amend your tax return after you have filed it, you can do this within twelve months of the original deadline, or you can write to HMRC for any changes afterwards.

Don't be afraid to ask for help

If you need help with your return, please visit the GOV.UK website or call the helpline on 0300 200 3310.

There are HMRC guidelines and guides available online, but if you are struggling, you can seek advice from an accountant or tax advisor.

Consumer group Which one? also offers one online self-evaluation tool which does the calculations for a tax return and submits them directly to HMRC.

However, you'll have to pay £10 for the service, or £36 if you're not a member.

If the tax bill is unexpected, check your tax code

When you file your tax return and you find that the amount of tax owed (or the refund of overpaid tax) is not what you expected, the reason may be an incorrect tax code.

If you suspect the code is incorrect, call HMRC immediately.

This is the only way to correct the error, as the code is not automatically changed as a result of filing the return.

HMRC should issue a new code to you and your employer within a few days.

Pay your bill

After you have filed your tax return, you will be told how much tax and, if you are self-employed, national insurance contributions (NICs) you will have to pay.

HMRC will accept your payment on the date you make it, not the date it appears in the account, even on weekends.

If you can't pay your tax bill, you should still file your return because the late filing penalties are lower than the late filing penalties.

You may also be able to avoid fines and set up a payment plan to pay in installments, but you should contact HMRC as soon as possible.

You can do this by calling the Business Payments Support Service on 0300 200 3835.

Don't be late

Late filing fees are quite high, so make sure you get your self-assessment in on time.

According to HMRC, you will be fined £100 if you don't submit your return one day after the deadline.

Then there will be a penalty of £10 per day for each day you don't file your tax return.

This is limited to 90 days – or £900.

So on top of the initial £100 fee, a late filing penalty of up to £1,000 applies.

If you are six months late, there will be a further fine of £300 or 5% of the money you owe, whichever is greater.

That's on top of the £10 daily charge accrued to date, so there's no shortcut to a smaller payment if you're late.

And after 12 months there is a further penalty of £300 or 5%.

There's also interest on top of that – and that went up last week, so late payers now have even more to spend.

If you deliberately fail to file your tax return, you may also be fined up to 100% of the tax owed.

Meanwhile, millions of people will see tax changes in 2024 that will affect both their income and savings.

What's more, Brits can be caught out by some simple tax mistakes that can cost up to £900.

Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.

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