HMRC alert: Over 300,000 Britons 'just two weeks away' from receiving shock tax penalty - how to avoid

The deadline for individuals choosing to complete their self-assessment via post is midnight October 31, with those missing it facing a potential £100 fine.

While most can file their self assessment tax return online, some must use paper forms This includes those reporting foreign income and gains or trust and estate information, as these sections are not available online.

The paper deadline is crucial for these taxpayers.

Alastair Douglas, CEO of TotallyMoney, warned: "With fines of £100 in place for late submissions of up to three months, it's important not to get caught out."

Self-assessment tax returns are required for various individuals. This includes self-employed persons earning over £1,000 gross income, partners in business partnerships, and those with a total taxable income exceeding £150,000.

Additionally, individuals who have received untaxed income, such as pension income over £2,500 or income over £1,000 from online trading or services, must submit a return.

Other untaxed income includes:

• Money earned through renting a property, including via Airbnb.
• landlords with rental income of £10,000 gross or over (net £2,500+).
• Tips and commission.
• Income from savings, investments and dividends.
• Foreign income.

Those subject to the High Income Child Benefit charge or who have received substantial interest from banks, building societies, or investments are also required to file.

Dan Whittaker, a personal finance expert at VivaMoney.co.uk, said: "If you're unsure whether any of the above apply to you, you can use this handy tool on the Gov.uk website to check whether you need to send a tax return."

To complete the self-assessment process, taxpayers need to gather necessary documents such as P60s, P45s, and records of benefits and expenses. HMRC provides online resources and YouTube videos to assist filers, particularly first-timers.

For paper submissions, completed forms should be sent to: Self Assessment HM Revenue and Customs BX9 1AS United Kingdom

Trusha Shah, tax manager at HW Fisher, said: "Last year 96 per cent of people chose to complete their self-assessment tax return online. To avoid the risk of your return getting lost in the post, and to allow yourself more time to gather all the information that you need to complete your tax return accurately, we'd always recommend completing your return online."

Shah shared five tips on how to complete a tax return

1. Allow yourself plenty of time. Gathering all the paperwork can be a timely process. You will need your P60 which will confirm the total tax deducted at source from income, as well as a record of benefits and expenses which can be found on your P11D or P9D forms. Additionally, if you have left a job in the last tax year, you will also need a P45 from your previous employer.
2. Don’t forget to claim tax relief on pension contributions. Make sure you keep details of any pension contributions made so that you can claim the correct tax relief for them.
3. Be sure to include charity gift aid payments. You will also need details of all your gift aid payments – e.g., have you sponsored a friend to walk for charity? This can be included as HMRC provides some tax relief on charitable giving.
4. Keep a copy of your completed tax return. If you are employed or a pensioner, you should keep all paperwork for 22 months after the end of the tax year. Self-employed people or landlords should keep all paperwork for five years and ten months. You should also keep a proof of postage in case there are any spooky postal delays.
5. Take advantage of your personal savings allowance. This can be applied to interest earned on your savings. The interest you receive on your savings could be tax-free up to £5,000 per year.

Are you a non-UK resident? Avoid these grave errors

• Make sure you are not paying tax twice – This is particularly important for non-UK residents with UK investment properties and who are earning rental income. If your agent is deducting tax at source, you should request the HMRC form NRL 6 (usually issued in July), to ensure you are not paying tax twice.
• Sold a property this year? Watch out for Capital Gains Tax (CGT) – If you are a non-resident who has sold or disposed of UK property or land, you will be required to submit a non-residential Capital Gains tax (NRCGT) return. This needs to be submitted within 60 days of completion, regardless of a loss arising on sale. Ensure you inform your tax agent in advance to arrange registration with HMRC including assistance with submission of the NRCGT return. Depending on when the property is acquired and the kind of property (residential/commercial), a market value either in April 2015 or April 2019 may be required to compute the capital gain or loss. If you miss the filing deadline, late filing and payment charges may apply.

HMRC offers additional support for vulnerable individuals or those with special circumstances. This includes people with dyslexia, autism, sensory disabilities, or health conditions such as stress and depression.

Douglas added: "Contact HMRC's extra support team for assistance. They're specially trained, and can guide you through the process with a video appointment or phone call."

Taxpayers can also designate someone to deal with HMRC on their behalf. This doesn't have to be a professional; it can be a trusted friend or family member.

HMRC has urged Britons remain vigilant against scams. Criminals often use emails, phone calls, and texts to attempt to extract personal and financial information.

Before sharing sensitive details, individuals should consult the 'HMRC tax scams' page on GOV.UK for guidance on identifying fraudulent communications.