Self-Assessment Tax Return Dread-Line Looms for Millions

Research from Prime Accountants has highlighted a huge spike in online searches just one day before the Self-Assessment Tax Return submission deadline of January 31, prompting our team to declare it ‘Tax Dread-line Day’. 

But why are so many people leaving it so late to prepare and file their tax returns? 

The last-minute rush to file the day before and on deadline day itself is when the fear of receiving a fine finally overtakes the need for reward, according to psychologists. 

A combination of fear around the potential cost of a tax return and common misconceptions around when payment needs to be made are adding to the dread of completing a Self Assessment Tax Return and influencing the decision to put it off as long as possible. 

Who leaves their Self-Assessment Tax Return to the last minute?

Google Trends data provides some insight into the locations of those leaving their return until the last minute. 

Data from January 30 and 31 2024 shows UK searches for ‘tax return’ were at their highest proportion in the following locations during this timeframe: 

• Congresbury, Somerset 

• Nazeing, Essex 

• Chobham, Surrey 

• Broxbourne, Hertfordshire 

• Lechlade-on-Thames, Gloucestershire 

Data released by HMRC shows that 778,068 returns were filed on 31 January 2024 for the tax year 2023-24, out of the 12.2 million returns due, including 32,958 customers who filed between 11pm and 11.59pm on deadline day. 

Late Self-Assessment Tax Returns

Data obtained via a Freedom of Information request for the tax year 2022-23 shows the number of Self-Assessment returns submitted late, split by region, with London and the South East clocking up the highest number of late returns.  

This includes tax returns submitted late for individuals, partnerships and trusts; the allocation to region representing the address as registered on an individual’s Self-Assessment return and all numbers are rounded to the nearest thousand. 

The filing deadline for returns is October 31 for paper returns and January 31 after the end of the tax year for online returns; and three months after a notice to file has been issued, if that is later.  

Not all returns submitted after the filing deadline will technically be classed as late, because HMRC applies a different due date for individual circumstances. However, the data does provide an indication of where tax returns are being submitted later than the deadline. 

Who needs to complete a Self-Assessment Tax Return?

Individuals who will need to file a Self-Assessment tax return include: 

• Those who were self-employed as a ‘sole trader’ and earned more than £1,000 (before tax relief) 

• Those who are a partner in a business partnership 

• Those who have earned £10,000 or more from savings, dividends or investments  

• Those who have earned £2,500 or more in untaxed income, for example, if you rent out a property or have foreign income 

• Those who earn £150,000 or more via an employer  

• If a person needs to pay Capital Gains Tax on profits from selling a second home, shares, or other chargeable assets  

• If a person’s (or their partner’s) income was over £50,000 and one of them claims child benefit  

• If somebody wants to claim tax back on work expenses over £2,500, private pension contributions, or donations to charity 

If you are unsure whether you need to complete a tax return, contact your accountant or HMRC for advice. Alternatively, you can speak to our tax team. 

Why do people leave it to the last minute to file their tax return? 

To better understand the psychology behind the dreaded tax return and identify ways to help clients overcome it, Prime has enlisted the expertise of Ruth Kudzi, founder and CEO of Optimus Coach Academy and a distinguished coaching psychologist, consultant, trainer and speaker. 

She said: “As humans we usually act on something because of fear or reward. If we feel like we will be rewarded for doing something, we’re more likely to act early and get that dopamine hit. 

“With tax returns, unless you know you’re going to get money back, there isn’t a reward. So the deadline works more on threat and the fear around receiving a fine.  

“However, the threat isn’t strong enough to make us act straight away. If we were fined every month for not filing, we would do it much earlier. 

“People may also fear how much the tax return will be. When we are in fear mode, we have higher levels of adrenaline and stress and are less likely to respond in a rational way.  

“When we are fearing something, we don’t have as much cognitive capacity to make that decision and even when we are expecting something bad, we may still choose to avoid it.” 

Self-Assessment Tax Return misconceptions 

Paislei Godley, associate director at Prime Accountants, believes that part of this fear is the result of a common misconception that payment must be made at the time a tax return is submitted, which Prime is trying to address. 

She said: “We know from experience that many clients put off completing their Self-Assessment until the last minute because they think they need to pay it up front. 

“Payment is due on the set payment date of January 31. If you are struggling to pay you can apply for a payment plan – however, to do so you must have filed your tax return. So the sooner you file your return, the sooner you can plan for how you can pay this.”   

How to avoid last-minute filing for your Self-Assessment Tax Return

To tackle the challenges of last-minute filing and encourage its clients to prepare well ahead of the ‘dread-line’ Prime has introduced a tiered pricing scheme that aims to provide that all-important reward that prompts people to act. 

The accountants has implemented a fee structure for the preparation and filing of Self-Assessment Tax Returns that incentivises clients to act sooner.  

Paislei added: “For our tax team, January is understandably one of the busiest times of the year and we need more resources available at this time. 

“The fee structure gives our clients time to plan and encourages them to look after their own finances while having access to support at the right time, and it takes some of the stress away from our team.”   

When is the Self-Assessment Tax Return deadline? 

The deadline for Self-Assessment Tax Returns for the 2023/24 tax year is January 31, 2025. 

The tax year covers the period April 6, 2023, to April 5, 2024. 

In addition to filing your tax return, you will need to pay any tax owed by midnight January 31, 2025, unless you have applied for a payment plan ahead of this time. 

How to make your Self-Assessment Tax Return more manageable

• Organise your filing – keeping your income and expenditure up to date can save a lot of time when preparing your tax return  

• Use software like Xero to simplify the process – this ensures consistent records and makes it much easier and quicker to access the information you need 

• Contact an accountant sooner rather than later if you find you need support 

• Be aware of the expenses and tax relief you are entitled to claim 

• Complete your tax return at the earliest possible opportunity – it will give you time to plan and budget for your tax bill