Workers have been told “don’t leave it to the last minute” to avoid HMRC’s big tax bill

People who pay their own tax are being urged to get their financial affairs in order sooner rather than later. On Wednesday, HMRC revealed that nearly 300,000 self-assessing customers filed their returns in the first week of the new tax year – almost 10 months before the deadline.

It was an increase on last year, when 246,000 people filed their returns between April 6 and 12. Now a financial expert has urged people to keep filing their returns and reaping the benefits. Self-assessment is generally used by the self-employed, but may also be necessary for people who are employed and paid PAYE but earn extra money from other sources.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “UK taxpayers may have until 31 January 2025 to file their self-assessment tax return, but an increasing number of people are realizing the benefits of completing this early pregnancy. The lure of getting ahead has already been recognized with nearly 300,000 people filing their tax return in the first week of the new tax year, compared to 246,000 who filed their return in the same week last year.

“There were also nearly 70,000 early birds who filed their return on the first day of the 2024-25 tax year. Filing early gives people enough time to make sure the information they’ve entered is correct, avoiding the stress that comes with leaving them to the last-minute task of scrambling to find the relevant documents. It also reduces the risk of missing the deadline and being fined, and can ease the financial burden of a large urgent bill to pay.

“Getting your return in early can help keep a personal budget on track if you have a big tax bill to pay because, in addition to filing your tax return by the end of January 2025, any tax due for the 2023-24 tax year must be paid by that date. Nobody wants to be hit with a big bill in January, just a few weeks after the extra expense that comes with the festive period and annual subscriptions and membership fees, so getting ahead can make financial sense.

“Early filers can take advantage of HMRC’s budget payment plan, where payments to cover your tax bill can be spread over a longer period of time and made weekly or monthly by direct debit. Those lucky enough to be entitled to a refund will receive an instant refund when their return is processed – money that could be used to earn interest in a savings account rather than in HMRC’s coffers.

“Once your tax return is submitted, HMRC may adjust your tax code, so check the change as mistakes can occur. Incorrect tax codes are common and it is your responsibility, not your employer’s or HMRC’s, to track them down. Tax code errors can occur if you earn money from multiple sources, such as a part-time job or a property portfolio, change jobs or have recently retired, and these inaccuracies can mean you’re overworked. Logging into your personal tax account, either online or through the HMRC app, will quickly flag any issues that need to be addressed.

“Remember, not everyone needs to file a tax return for the 2023-24 tax year, as tax is automatically deducted from their pay (known as Pay-As-You-Earn, or PAYE), pensions or savings . For those who do not have tax automatically deducted, have earned additional untaxed income such as from property, have a total taxable income of more than £150,000 or have another qualifying reason, then filing a tax return is mandatory.

“Those who need to claim higher or additional tax relief on pension contributions, as well as subscriptions to schemes such as venture capital trusts (or are part of a VCT dividend reinvestment plan) and enterprise investment schemes, must remember to do so on a charge. returns – even if they don’t need to complete one – because HMRC won’t ask them to. The evidence suggests that the first of these reasons is particularly vital, with a surprising number of pension savers failing to claim higher or additional rate tax relief.”