How long to complete self assessment tax return?

Tax season is a time of year that many people dread. The prospect of navigating through complex tax forms and calculations can be intimidating, especially when it comes to the self-assessment tax return in the United Kingdom. However, understanding how long it takes to complete your self-assessment tax return can help alleviate some of that stress and make the process more manageable.

What is a Self-Assessment Tax Return?

Before we delve into the time it takes to complete a self-assessment tax return, it’s important to understand what it is. In the UK, the self-assessment tax return is an annual tax filing required for self-employed individuals, business owners, landlords, and anyone else with income not covered by Pay As You Earn (PAYE) tax deductions. It’s a way for Her Majesty’s Revenue and Customs (HMRC) to determine how much tax you owe or how much they owe you in overpaid taxes.

Preparation is Key

The time it takes to complete your self-assessment tax return depends on various factors, and one of the most significant is how well you’ve prepared throughout the tax year. Keeping meticulous records of your income, expenses, and any other financial transactions can significantly reduce the time required to complete your return.

If you’ve maintained accurate records and organized your financial documents, you can complete your self-assessment tax return more efficiently. However, if you’re disorganized and need to hunt down receipts and financial statements, the process can be much more time-consuming.

Understanding the Deadlines

Another important factor in determining how long it takes to complete your self-assessment tax return is understanding the deadlines set by HMRC. The tax year in the UK runs from April 6th of one year to April 5th of the next year. The deadline for filing your tax return and paying any taxes owed is usually January 31st following the end of the tax year. For example, for the tax year that ends on April 5, 2023, the deadline for filing your return and paying any taxes owed would be January 31, 2024.

The earlier you start working on your tax return, the more time you’ll have to ensure it’s accurate and complete. Waiting until the last minute can lead to rushing through the process, potentially resulting in errors and missed deductions or credits.

The Simple vs. Complex Tax Returns

The complexity of your financial situation plays a crucial role in how long it takes to complete your self-assessment tax return. HMRC provides different tax return forms, including the short and simplified SA200 form for straightforward tax situations and the more comprehensive SA100 form for those with complex financial affairs.

complex investments

If your tax situation is relatively simple, with only a few sources of income and straightforward deductions, you may be able to complete your self-assessment tax return in a matter of hours. However, if you have multiple income streams, complex investments, or numerous deductions to account for, it can take significantly longer to gather the required information and complete the forms accurately.

Using Tax Software or Hiring a Professional

Many individuals opt to use tax software to complete their self-assessment tax return. Tax software can simplify the process by guiding you through the necessary steps, performing calculations, and checking for errors. Using tax software can save you a substantial amount of time compared to manually completing paper forms.

Additionally, if you’re uncertain about how to handle certain aspects of your tax return, tax software often provides helpful explanations and resources. However, it’s essential to ensure that the software is up-to-date and that you’re using the correct version for the tax year you’re filing for.

Tax advisor

If your tax situation is especially complex or if you prefer not to deal with tax-related matters personally, hiring a qualified tax professional, such as a certified accountant or tax advisor, can be an excellent option. While this approach may come with a cost, it can save you time and ensure that your return is accurate and fully compliant with HMRC regulations.

Common Steps in Completing a Self-Assessment Tax Return

To understand how long it takes to complete a self-assessment tax return, it’s helpful to break down the common steps involved in the process:

Gathering Documents

Start by collecting all the necessary financial documents, such as income statements, expense receipts, and investment statements. The time required for this step depends on how organized your records are.

Entering Information

Whether using tax software or filling out paper forms, you’ll need to enter information about your income, expenses, and deductions. The complexity of your financial situation and the accuracy of your records impact the time spent on this step.

Calculating Taxes

The tax software typically handles calculations automatically. However, if you’re manually completing paper forms, you’ll need to calculate your tax liability. Errors can lead to delays in the process.

Claiming Deductions and Credits

Ensure that you claim all eligible deductions and credits, as this can impact the final tax amount. Some credits may require additional documentation or calculations.

Reviewing and Editing

It’s crucial to review your tax return for accuracy and completeness. Editing any mistakes or omissions is a necessary part of the process.

Filing the Return

After completing the return, you can file it electronically using HMRC’s online service or mail a paper return. Electronic filing is typically faster.

Paying Taxes Owed

If you owe taxes, you’ll need to make a payment. HMRC offers various payment methods, including online, by phone, or by mail.

Receiving Confirmation

HMRC will provide a confirmation once your return is successfully filed. Keep this confirmation for your records.

Estimated Time Frames

Given the variability in personal financial situations, it’s challenging to provide an exact estimate of how long it takes to complete a self-assessment tax return. However, here are some general time frames to consider:For individuals with relatively simple tax situations and organized records, it may take a few hours to a day to complete the entire process.

Complex tax situations

Those with moderately complex tax situations might require a few days to a week to gather and organize information and complete the return.Individuals with highly complex financial affairs or those who struggle with organization may need several weeks to complete the self-assessment tax return accurately.

It’s essential to start the process early and allow extra time for unexpected issues or questions that may arise. If you’re working with a tax professional, their availability and workload may also influence the timeline, so contacting them well in advance is advisable.

Conclusion

Completing a self-assessment tax return can be a time-consuming but necessary task for those with financial interests not covered by PAYE deductions. The time it takes to complete the return depends on your financial situation, organizational skills, and the approach you choose to take—whether using tax software, handling it manually, or seeking professional assistance.

To make the process as smooth and efficient as possible, it’s crucial to stay organized throughout the tax year, start early, and understand the deadlines set by HMRC. By doing so, you can reduce the stress associated with tax season and ensure that your self-assessment tax return is both accurate and submitted on time.