HM Revenue and Customs (HMRC) has announced that the number of people filing Self Assessment returns on the first day of the new tax year has more than doubled since 2018. More than 77,500 people submitted their tax return for the 2022-23 tax year on April 6, 2023 - the first day of the new 2023/24 tax year - compared with nearly 37,000 on April 6, 2018.
Myrtle Lloyd, HMRC's director general for customer services, said: "Filing your self-assessment early means you can spend more time building your business or doing the things that you enjoy and less time worrying about completing your tax return.”
The deadline to file tax returns for the 2022 to 2023 tax year is January 31, 2024, however, tax expert Paul Falvey suggests the rise in early returns may be taxpayers seeking tax refunds.
The Tax Partner at BDO said: “HMRC are commenting that the number of people filing on day one of the tax year has doubled and seem to be using this as a prompt to encourage others to file soon - not least because this may well lead to early tax payments.
“While early filing does indeed mean that taxpayers avoid last minute filing stress and late filing penalties, the increase in early filers might be as a result of taxpayers seeking tax refunds.”
He added: “If you think you have paid too much tax then the sooner your tax return is sent to HMRC the earlier you will get your money back.”
Once someone has submitted their tax return for the 2022/23 tax year, HMRC will let people know as soon as the return has been processed and arrange for any overpayment to be refunded. People can also check if they are due a refund in the HMRC app once they have filed their return.
Mr Falvey also said that a common example of a tax overpayment is when too much tax has been taken from pension withdrawals.
He explained: “This overtaxing occurs because those who draw down from their flexible pension pots are currently taxed at a flat rate which doesn’t take account of their level of income or any Personal Allowances available. Of course, you can reclaim this during the year too, the latest figures from HMRC sourced by Which? reveal that more than £48m was repaid by HMRC to 15,856 people overtaxed on pension withdrawals in the first three months of this year alone.
“Rather than it being a case of taxpayers becoming more inclined to comply promptly with their filing duties, this increase in early filing seems more likely to reflect current inadequacies with other parts of the tax system.”
HMRC also said that by completing their Self Assessment early, customers have avoided the stress of last-minute filing - something which encouraged more than 860,000 customers to file their tax return for the 2021 to 2022 tax year on January 31, 2023.
You can find out everything you need to know about filing your tax return online at GOV.UK.
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