Britons to spend 25mln hours filling tax returns this yearwritten by Bella Palmer
With the 31 January online tax return deadline fast approaching, Which? surveyed 4,000 people and found the average time taken to complete a return is more than two hours
Doing tax returns can be a long and arduous task for some and Britons will have spent 25 million hours filling in their tax returns this year, new data revealed.
Consumer group Which? also found many will have to dip into their savings to pay the tax they owe or will leave the task to the last minute.
With the 31 January online tax return deadline fast approaching, Which? surveyed 4,000 people and found the average time taken to complete a return is more than two hours.
Our research shows that some people spend hours on their tax return, so the sooner you can get started the better, said Jenny Ross, Which? money editor.
While the waiving of penalties for late tax returns came as a relief to the millions of people who are yet to file their returns, you’ll still be charged interest if you don’t pay your bill by 31 January, Ross said.
A quarter (25%) of people managed to complete their return in less than one hour, but 8% of respondents said it took them more than five hours.
HMRC has waived penalties on late tax returns until 28 February 2022 and late tax payments until 1 April 2022. However, Which? warned that self-assessors will still be charged interest if they do not pay their tax bill by 31 January – HMRC will still charge 2.75% interest on unpaid tax from 1 February onwards.
Two in five people (38%) have already budgeted for taxes, while one in five (22%) were planning to dip into their savings. Another one in five (19%) said they had not thought about it yet.
Those unable to pay their tax bill can split their bill into smaller instalments. One in six people (17%) told Which? they planned to use this arrangement to pay the tax they owe for 2020-21.
Which? also found gaps in people's tax knowledge. For instance, there was confusion regarding tax paid on state pension.
Three in 10 people (31%) wrongly thought they did not have to pay tax on the money they receive from their state pension, and a quarter (27%) didn’t know.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.