Contractors scared of tax self-assessment

Contractors scared of tax self-assessment

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Britain's smallest businesses, such as contractors, are anxious when it comes to filling in their self-assessment tax forms, according to a new study.

A YouGov poll found that a fifth (21 per cent) of respondents said they were concerned about completing the return themselves, while a further five per cent said they were terrified.

Just over a third (35 per cent) said they are confident about their capability to fill out self-assessment to HM Revenue and Customs (HMRC) themselves.

It may come as no surprise, therefore, that more than half (56 per cent) of respondents said they will enlist someone's help to complete the form. Of those 52 per cent will pay a professional bookkeeper or accountant, while four per cent will make the most of their tax savvy friends and families.

Contractors do tend to leave their submissions until the last minute too, with almost half (46 per cent) saying they complete the form in the final month and 16 per cent wait until the final week before the January deadline.

Many people, however, miss this deadline altogether. HMRC posted an astonishing 850,000 £100 fixed-penalty fines by February 20th to individuals who were supposed to file self-assessment returns but missed the deadline. This will have brought in around £85 million to the government department. This will undoubtedly grow as people fail to pay the fine or file their return within the three-month cut-off point.

This figure may seem big, but it is actually down on the number of late returns last year.

"Anyone who hasn't yet sent their 2011-12 tax return to HMRC will have already incurred a £100 late-filing penalty," said a spokesperson from HMRC.

"Non-filers have to file online now to avoid further penalties or contact us to ask to be taken out of self-assessment, and provided they meet the criteria, we will take them out of SA and cull any penalties incurred."

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