Only a third of UK adults feel confident they could complete a self-assessment tax return form correctly, as deadline approaches

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• More than half (55%) don’t know when the correct deadline for filing is
• Two fifths (41%) of current or soon-to-be higher income tax payers unaware they might need to fill in a self-assessment tax return to claim all of their pension tax relief
• Standard Life outlines the key things to be aware of when it comes to self-assessment

As the deadline to file online self-assessment tax returns looms, new research¹ from Standard Life finds that most UK adults are unconfident or unsure they could fill in the form correctly.

Three in ten (30%) admit they do not feel confident they could complete the form correctly, with 18% feeling neither confident nor unconfident, and 17% not being sure. Only a third (35%) feel assured they could complete the form correctly.

The research highlighted a widespread lack of awareness around self-assessment timings, with more than half (55%) not knowing when the deadline for filing is.

In addition, among those who are currently, or soon will be, in the higher income tax bracket, 41% are unaware that they might need to fill in a self-assessment tax return to claim all of their pension tax relief. A further one in ten (10%) were also not sure if they knew about this.

Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group, comments: “The deadline for filing self-assessment tax returns is fast approaching, with returns needing to be submitted online by midnight on 31st January. So, if you’re one of the categories of people who needs to send a tax return then now is the time to act.

“Tax returns can be tempting to put off, but it’s important to understand what’s required and file it on time to avoid any penalties which can be costly. For many higher earners, even if you are not in a category that needs to submit a return, accurately completing a self-assessment can result in boosting pension contributions as well as paying less tax in the short term, so it’s well worth the paperwork. Tackling the forms in advance, rather than leaving it to the last minute, will give you the time to gather the information needed and make the submission as stress free as possible. If this is your first time filing a self-assessment tax return, you’ll need to register which can take up to 20 days, so you might miss the deadline if you’ve not done this yet. However, the sooner you get going, the earlier it will be in, and you’ll be ahead of the game for next year.”

Dean Butler outlines the key things to be aware of when it comes to self-assessment:

What is self-assessment and who needs to submit?

“Self-assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax. If you are employed, your income tax is usually automatically deducted from your wages by your employer, but if you are self-employed or receive any other income, you will need to submit a self-assessment tax return each year to pay income tax and National Insurance.

“You’ll need to file a self-assessment if, in the last tax year (April 2022-April 2023):

• You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• you were a partner in a business partnership
• you earned £100,000 or more

“Make sure to check you tax code is correct before submitting your self-assessment. If you need assistance with your self-assessment, then you can contact HMRC, or find an accountant accredited in the UK to help, which can be relatively inexpensive. You can also appoint a relative or friend to fill in and send your tax return on your behalf.

Why should I be thinking about my pension?

“If you are earning £50,271 a year or over, not completing a self-assessment tax return could lead to you missing out on valuable tax relief on pension contributions. Anyone with a pension receives 20% tax relief on every contribution they make, and this is added automatically. However, higher rate taxpayers need to claim the extra 20% of tax relief they are entitled to, which will then be repaid via a tax rebate, a change in tax code (which will mean you’ll pay less tax the following year) or a reduction in your tax bill for the current year. If you’re using salary sacrifice to make contributions this might not be necessary - you can always check with your employer if unsure.

“Higher rate taxpayers should complete a self-assessment return every year they’ve paid higher rates, and anyone that hasn’t done this may have built up unpaid tax relief in arrears. It’s worth investigating if you think this applies to you, as you can make claims for up to four previous tax years, meaning you could be owed thousands of pounds from the government. HMRC doesn’t tend to prompt non-self-employed people to submit a self-assessment, so any higher rate taxpayers who pay their tax through PAYE need to actively request to submit a tax return.

Is there anything else I should be aware of?

Once you start completing a self-assessment, you will be expected to complete one in each future year. Be sure to make a note in the calendar for when the time comes again.

Another important reason to have a good grip on your tax return if you’re a higher earner is there’s a chance you might have exceeded your annual allowance, and it’s your responsibility to disclose this. The annual allowance is the amount you can pay into your pension each year with tax relief, and this sits at £60,000 for most people. If you’ve already started accessing your pension your annual allowance will reduce to £10,000, and if you earn £200,000 or more your allowance could begin to be 'tapered' down to £10,000.

How do you submit a tax return?

“First, you’ll need your Government Gateway user ID and password to register for online self-assessment. If you don’t have a Government Gateway account, you can create one when you first visit the self-assessment section of the HMRC website and sign in. You’ll be prompted to set up a user ID and password, and then you’ll be sent a 10-digit Unique Taxpayer Reference (UTR) number in the post. You’ll also be sent your activation code, which can take up to seven days to arrive. You need to activate your account within 28 days of the code arriving, or it’ll expire. You’ll then be able to use the HMRC online service to submit your return. Alternatively, you can send your tax return via post.

What happens if you miss the deadline?

“If you fail to file your return, file it after the deadline, or fail to pay your tax bill, you’ll incur a penalty. If your return is up to three months late, you’ll be charged £100, and if it’s any later then you could be charged an extra £10 a day up to a maximum of £900. If you’re late paying your tax bill then you’ll be charged interest on late payments too. You can appeal against a penalty if you have a legitimate excuse, but it’s far less hassle to file your return on time and pay your bill in the first place!”

 

ENDS

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Notes to editors:

¹ Opinium conducted research among 2,000 UK adults. Fieldwork was conducted 12th to 16th January 2024. Results have been weighted to be nationally representative.

About Standard Life

• Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years.
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
• Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.
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