At the moment 1 in 3 of us are spending hours each year filling a tax return for HMRC. Official data released from HMRC has now revealed that 16% of us owe nothing at all and a further 8% of us owe less than £50.
In recent years there has been an increase in people becoming self-employed or working as freelancers and this means they have to fill in tax returns. Initially many of these people would earn below the personal allowance threshold and thus not have to pay any tax at all.
This news can be understandably frustrating if you pay your accountant to prepare and submit a tax return on your behalf to then find out you are not required to pay any tax.
To combat this HMRC is currently going through a process to remove people from the self-assessment system where filing a return is not necessary and is removing approximately 400,000 people each year as a result.
Unfortunately if you are a company director or earn over £100,000 per year then you are required to submit a tax return to HMRC.
If you feel that submitting a tax return is unnecessary phone HMRC to discuss this. If they agree they will happily remove you from this self-assessment system saving you hours of time and headaches each year.
Hopefully in future years with the introduction of the new digital tax accounts that was announced in the budget we will see even more people removed from the self-assessment system and a further decrease in red tape for business owners.