The number of people required to fill out a tax return in the UK has hit a record high, which analysts have attributed to an increase in self-employment.
Figures released by HM Revenue & Customs, the tax authority, on Monday revealed 11.7m people were required to submit a self-assessment return and pay any tax due by January 31 — up from some 11.5m last year, the previous highest total.
Of those expected to file a return, 10.8m — 92 per cent — did so on time. The 958,296 individuals who missed the deadline face an immediate £100 fine, with the potential for further penalties.
Overall, HMRC received a record 11.1m returns by the deadline — made up of both expected and unsolicited returns and late self-assessment registrations. Many left it to the last minute however. More than 700,000 submitted their tax returns on deadline day, with 26,562 completing their returns between 11pm and 11:59pm on January 31. Meanwhile, 10.4m submitted their return online, rather than via post — more than ever before.
“The record number of tax self-assessments filed reflects the rise and rise of the self-employed sector,” said Alasdair Hutchison, policy development manager at the Association of Independent Professionals and the Self-Employed.
Data released last month from the Office for National Statistics showed the number of self-employed people had risen above 5m for the first time.
Mr Hutchison added: “The record number of self-assessments isn’t just because of the rise in the number of people who define themselves as self-employed, however: it’s also because more and more people now have side hustles alongside other work.
“Online platforms and other emerging technologies make it easier than ever before for people to top up their income by running their own business on the side. Many people even use this as a way to test the water before they take the leap into full self-employment.”
Angela MacDonald, HMRC’s director-general for customer services, said: “It’s great to see that the majority of customers have submitted and paid their tax returns before January 31.”
Tax experts advised people who missed the self-assessment deadline to submit a return as soon as possible.
Late returns attract an initial £100 penalty, which applies even if there is no tax to pay or if the tax due is paid on time. After three months, there are additional daily penalties of £10 a day, up to a maximum of £900. After six months, there is a further penalty of 5 per cent of the tax due or £300, whichever is greater. After 12 months, another 5 per cent or £300 charge applies, whichever is greater. There are also additional penalties for paying late of 5 per cent of the tax unpaid at 30 days, six months and 12 months.
Taxpayers can appeal against the £100 penalty if they think they have a reasonable excuse. This might include being unable to file due to technical issues with HMRC’s online services, a death in the family or an unexpected stay in hospital.
“However, the definition of a reasonable excuse is subjective and is being more frequently tested in many cases that reach tribunal,” said Dawn Register, partner in tax dispute resolution at accountancy firm BDO.
