More than 600,000 will miss self-assessment deadline

News Posted 30/01/23
New research from Handelsbanken Wealth & Asset Management shows that more than 600,000 self-employed people think they will miss the January 31 deadline for completing self-assessment tax returns and paying any money owed.

Data from HMRC shows that a week before the deadline (January 24), around 3.4 million had yet to file returns for the 2021/22 tax year and it is expecting 12 million returns in total compared with 10.8 million for the 2020/21 tax year.

Handelsbanken Wealth & Asset Management’s research found young men aged 18-34 are most likely to believe they will miss the deadline, with 13% of them fearing they won’t respond in time.

The study highlights how the rising number of self-assessment returns reflects changes in the way people are employed.

It found that 50% of working adults say they are a PAYE employee with no additional income while more than a quarter (28%) are retired. This means that nearly a third (29%) – 9.4 million people – are self-employed in some capacity. Many will have PAYE jobs and self-employment income on the side whereas some will be entirely self-employed.

Men (25%) are more likely than women (16%) to have an income stream from self-employment, while younger adults aged between 18 and 34 are much more likely to be self-employed at 40%, compared with older age groups.

Just 20% of those aged 35 to 54 are self-employed to some extent, and only 10% of those aged 55 and over have additional self-employed income.

The rise of the ‘side hustle’ is partly down to the cost-of-living crisis but is also being driven by people deciding to follow their passion alongside their PAYE employment.

More than a third (35%) said they became self-employed to do something they are passionate about, while around a quarter (24%) did it to supplement the income they receive from their main job, due to the pandemic and cost-of-living crisis.

Job satisfaction is more important to younger people, with 24% of those 18-34 saying they became self-employed because they were not enjoying their job, dropping to 21% for 35–54 and just 10% for the over 55s.

Mark Collins, head of tax at Handelsbanken Wealth & Asset Management, said: “While tax doesn’t have to be taxing, as the old HMRC adverts say, filling in self-assessment forms becomes a little more complicated when people have a range of income streams from different sources.

“There is plenty of help available from HMRC, however, there is the possibility of a £100 fine for being late with further penalties kicking in after three months.

“This highlights the importance of seeking advice, being organised and keeping a close eye on your tax records, including business income and outgoings, throughout the year.”

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