TaxPersonal TaxMillions filling ‘unnecessary’ tax returns

Millions filling ‘unnecessary’ tax returns

Millions of UK taxpayers completing unnecessary self-assessment forms, despite HMRC removing 400,000 from process each year

Millions filling ‘unnecessary’ tax returns

MILLIONS of UK taxpayers are undertaking the strenuous process of completing tax returns, despite owing HM Revenue & Customs no money, critics are claiming.

According to official figures, a quarter of people filling in tax returns owe less than £50 or nothing at all.

Currently, around a third of UK taxpayers have to submit tax returns every year. In 16% of cases, nothing is owed, while in a further 8%, less than £50 is owed.

Changes to the way child benefit is administered often mean at least one parent or guardian must submit a self-assessment form, which means some or all of it can be clawed back from higher earners.

Workers who earn over £100,000 or directors of companies must automatically fill in a tax return, even if they have no extra, undeclared income.

Meanwhile, others prefer to use them as records to help with loan applications or other legal endeavours.

It is hoped the process will be ameliorated with the introduction of online tax accounts which will receive up-to-date information of people’s pay and dividends. In theory, the move will abolish the problem of people filling in tax returns needlessly, although advisers warn it will take some years before the self-assessment is ended.

A spokesman for HMRC said: “We don’t want anyone to fill in a tax return unless it’s absolutely necessary. That’s why we automatically remove 400,000 people from self-assessment every year.

“For those who do, we’ve made it easier than ever to send in a self-assessment return by bringing in short tax returns and online self-assessment, and we are taking this much further by introducing the new digital tax accounts.

“If you don’t think you need to be in self-assessment contact us, and if we agree, we’ll take you out of the system.”

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