How to reduce your tax bill as self assessment deadline approaches
Millions of taxpayers are yet to send their tax returns to HMRC
The deadline to file a self assessment tax return to HMRC is approaching and five million people still need to send their forms and pay their bill.
More than 12 million people file a tax return each year to report any untaxed income to HMRC.
The "countdown is on", said HMRC, for the 5.4 million customers who still need to send a self assessment form and pay a tax bill by 31 January.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Around 40,000 people used the festive period to file their return, according to HMRC, ditching "last-minute shopping and wrapping", said This is Money. Some 4,409 people did so on Christmas Day. Another 38,260 filed on New Year's Eve and 24,828 on New Year's Day.
Many people may not realise they need to file a tax return, but "even if you think you have nothing to pay", it is probably a good idea to investigate the matter or you may potentially "face penalties" for a failure to act, the news website added.
Who needs to file a self assessment tax return?
Most people have taxes "deducted automatically" via PAYE from their pay, pensions or savings, said MoneySavingExpert, so won't need to file a tax return.
Individuals such as the self-employed or businesses where tax isn't automatically deducted from earnings will typically need to complete a self assessment form.
This could apply if you run your own business or earn untaxed income as a landlord, or if you sell items on eBay. A self assessment could also be necessary if you rent out a room in your house online.
As a "general rule of thumb", added the financial website, you probably don't need to complete a tax return if you earn below £1,000 from selling goods or services online.
You can use HMRC's online tool to check what you need to do.
People who need to submit a return include employed workers earning more than £150,000 a year.
More pensioners may also need to complete a tax return, said The Times, as the rising state pension means those with "even a small amount of additional income will find themselves paying some tax" as their earnings will be above the frozen £12,570 personal tax allowance.
How to reduce your self assessment tax bill
The most "straightforward way" to reduce your bill, said Moneyfarm, is to ensure you are claiming all the reliefs you are entitled to.
Tax relief can be claimed on expenses related to "travel, professional practice fees, uniform maintenance, purchase of work equipment like personal protective equipment (PPE)", and even if you work partly from home.
Those facing a "hefty tax bill" can take steps to cut it, said Investors' Chronicle, by including pension contributions and charitable donations.
If you are putting money into a pension, and you're a higher or additional-rate taxpayer, you can claim the difference between the top tax rate of 40% or 45% and the basic 20% rate that is provided on pension contributions automatically.
Gift Aid on charitable donations provides 20% relief that goes directly to the charity.
Using the marriage allowance, where a lower-earning spouse below the income tax threshold transfers some of their allowance to a higher-earning partner, can also reduce your "combined tax bill", added the financial publication.
Whether you run a business or are self-employed, "effective tax planning can significantly reduce your tax obligations", said advisory firm Frazer James, such as using eligible expenses to "manage your taxable income and avoid falling into higher tax brackets".
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Marc Shoffman is an NCTJ-qualified award-winning freelance journalist, specialising in business, property and personal finance. He has a BA in multimedia journalism from Bournemouth University and a master’s in financial journalism from City University, London. His career began at FT Business trade publication Financial Adviser, during the 2008 banking crash. In 2013, he moved to MailOnline’s personal finance section This is Money, where he covered topics ranging from mortgages and pensions to investments and even a bit of Bitcoin. Since going freelance in 2016, his work has appeared in MoneyWeek, The Times, The Mail on Sunday and on the i news site.
-
Road trip: New England’s maple syrup season
Feature New England is serving up maple syrup in delicious and unexpected ways
By The Week US Published
-
Music Reviews: Mdou Moctar, Panda Bear, and Tate McRae
Feature “Tears of Injustice,” “Sinister Grift,” and “So Close to What”
By The Week US Published
-
What's at stake in the Mahmoud Khalil deportation fight?
Talking Points Vague accusations and First Amendment concerns
By Joel Mathis, The Week US Published
-
5 reasons to file your taxes sooner than later
the explainer Many experts recommend filing well ahead of the annual April deadline
By Becca Stanek, The Week US Published
-
What are your options if you end up owing taxes?
The Explainer If you can't pay your bill in full, do not despair
By Becca Stanek, The Week US Published
-
5 options for filing your taxes for free
the explainer This year, the IRS has expanded its Direct File program into 25 states
By Becca Stanek, The Week US Published
-
How to figure out when your tax refund will arrive
The explainer How long do you have to wait between submitting your return and receiving the money?
By Becca Stanek, The Week US Published
-
5 tax deductions to know if you are self-employed
The explainer You may be able to claim home office, health insurance and other tax deductions
By Becca Stanek, The Week US Published
-
What to know after a disaster and ahead of tax season
the explainer The IRS honors the victims of natural disasters like fires and earthquakes with extended deadlines and tax relief
By Becca Stanek, The Week US Published
-
Do you need to pay taxes on extra cash you make selling online?
The explainer The IRS is cracking down on people who fail to report added income from their side hustles
By Becca Stanek, The Week US Published
-
Will you owe taxes on your year-end bonus?
The Explainer Since your bonus counts as supplemental wages, it can be subject to different federal withholding rules
By Becca Stanek, The Week US Published