Taxpayers risk an “automatic £100 fine” if they fail to submit their Self Assessment tax returns by the January 31 deadline.
Last year saw a significant surge in festive period submissions, with 25,769 people filing their returns between 24-26 December.
While completing tax returns during the holiday season might mean missing some festive celebrations, HMRC actively encourages early filing to avoid penalties and mounting interest charges on unpaid tax.
Emily Coltman FCA, Chief Accountant at FreeAgent said: “It’s vital that people don’t miss the Self Assessment deadline and cause themselves unnecessary pain.
“The last thing businesses need at this difficult time is to incur an automatic £100 fine for missing the deadline, but it’s also important that they pay their tax on time too!
“If they don’t, these penalties can quickly build up and create a financial headache in the New Year.”
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HMRC’s phone lines remain open throughout most of the festive period
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The trend shows more Britons are choosing tax returns over turkey, with Christmas Eve alone seeing 8,876 submissions last year, and 4,757 on Christmas Day itself – a 68 per cent increase from the previous year.
HMRC’s phone lines remain open throughout most of the festive period, closing only on Christmas Day, Boxing Day and New Year’s Day.
Experts warn that taxpayers typically spend around 7 million hours on hold to the tax office annually, with waiting times reaching their peak in January.
Alastair Douglas, CEO of TotallyMoney, suggests using the Christmas period to get ahead: “While you might not be planning on sorting out your tax return over Christmas, it might actually save you time in the long run while making January a little less stressful.”
The quieter festive period offers a prime opportunity to reach HMRC quickly, avoiding the traditional January rush when afternoon waiting times are particularly lengthy.
Those selling on platforms like Etsy, Ebay, and Vinted must remember to file returns if sellers are making over £1,000.
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Coltman explained that small business owners and self-employed people have been hit hard as a result of rising prices, record inflation and the ongoing energy crisis.
Around 14 per cent of small businesses anticipate either worse performance or closure in the next 12 months.
She emphasised that it is “therefore vital that they don’t miss the Self Assessment deadline”.
FreeAgent has provided several practical tips to help business owners complete their Self Assessment returns efficiently.
A key recommendation is to gather all necessary paperwork first, including P60 and P11D forms, bank interest certificates, pension income documents and Gift Aid donation records.
Ensuring documentation is for the correct tax year – ending April 5, 2024 – is crucial, particularly for salary and tax figures which may vary annually.
For those with joint bank accounts, only their share of interest should be included, while ISA interest should be omitted entirely.
The firm also advises careful attention to Marriage Allowance claims, which can only be received by basic or intermediate rate taxpayers from non-taxpaying partners.
Experts strongly advise against leaving tax returns until the last minute, warning of potential HMRC online filing service delays during peak periods.
Coltman warned: “Not only are you more likely to make mistakes if you’re trying to fill the form in a rush, but you may also encounter log-jams in HMRC’s online filing service as lots of other taxpayers all try to file at once.”
With over 25,000 taxpayers having submitted returns during last year’s festive period, the Christmas break presents an ideal opportunity to complete returns without the January rush.
HMRC’s extended holiday opening hours provide ample time for queries, with shorter waiting times than the traditional January peak period.
