There is around a month left to tell HMRC if you want to file a paper self-assessment tax return and it may be worth getting your finances in order now even if you aren’t ready to pay yet.
Frozen tax allowances and rising wages and asset values have pushed more people into the self-assessment tax trap but while most wait until the 31 January deadline to file their return online, anyone wanting to complete the document on paper needs to tell HMRC by 5 October.
Anyone filing a paper tax return needs to send it back to HMRC by 31 October, three months before the online deadline.
Very few taxpayers use the paper route, with HMRC figures showing just under 3% were filed by 31 October last year.
It may appeal to some people though.
“The demise of paper returns is natural in the modern world, but some people still need to use the traditional route, such as the visually impaired or the less digitally savvy, which includes older taxpayers who have never submitted a tax return online,” says Alice Haine, personal finance analyst at Bestinvest.
How to register for self-assessment
You usually need to complete a self-assessment tax return if you are self-employed and also to report untaxed earnings from investments such as property or profits from shares and funds outside an ISA .
If you haven’t completed a tax return before, you will need to contact HMRC to get a unique taxpayer reference.
This can take 15 days to arrive by post.
Once you have this, you can complete the tax return either on paper and post it back or file online.
Anyone completing a paper tax return and planning to post it to the taxman needs to tell HMRC by 5 October and file by the end of the month.
Alternatively, you can file online until 31 January.
How to file a paper self-assessment tax return
You need to contact HMRC to receive a paper self-assessment form, which then needs to be posted back to the taxman.
Haine warns that it is getting harder to do this as HMRC continues to push people online.
“With the online option more favoured, HMRC has made it harder for people to get their hands on a paper return,” she says.
“It is no longer routinely sent to taxpayers, so those than want it must contact HMRC and request a paper version of the SA100 tax return along with any supplementary pages they need to cover additional sources of income. “
The pros and cons of a paper tax return
A paper tax return may appeal to the less digitally-savvy and the good news is that the actual tax bill doesn’t have to be paid until 31 January.
Anita Wright, independent financial adviser at Bolton James, says this allows you to hold onto your cash and potentially benefit from interest accrual in the meantime.
“With current interest rates, you can still earn a decent return, as many high-interest accounts offer around 5% per annum,” she says.
“If the money is held in such an account until the end of January 2025—and assuming interest rates don’t drop too quickly—this could result in extra interest earnings. This makes it potentially more advantageous to delay payment rather than settling up early with HMRC.”
Haine says filing in October also gives people more time to budget and prepare a payment plan if needed.
“The real benefit is that it removes the stress that comes with last-minute filing, reduces the risk of missing the deadline and incurring a fine and allows customers to find out if they are owed money, with any overpayments quickly refunded,” she says.
There are risks though, especially with potential postal delays.
Haine also warns that the paper process can be cumbersome as errors need to be crossed out and the form must be signed otherwise it will be considered invalid so it can be easy to make mistakes, especially if HMRC doesn’t understand your handwriting.
“The system is complicated, and you don’t want to make a mistake,” she says.
“If in doubt, consult a tax adviser to ensure everything is correct.”
Another option is just to prepare your tax return online now so you know how much you need to pay and then just wait to file and pay in January.
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