HMRC Tax Return Changes: Who's Affected And What To Do

Chloe Fitzgerald

4 min read

Post on May 20, 2025

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Key Changes to the Self-Assessment Tax Return Process for 2024

HMRC is modernizing the tax system, leading to several key changes in how you file your UK tax return. Staying informed about these updates is vital for accurate and timely self assessment tax return completion.

Digitalisation and Online Filing

HMRC is increasingly pushing for digital tax returns. This means fewer paper returns and a greater emphasis on using their online portal for your self assessment tax return.

• Benefits of online filing: Faster processing times, reduced errors due to automated checks, and enhanced security for your personal and financial data.
• Support for digital filing: HMRC offers comprehensive guidance and helpline support for those unfamiliar with online systems. Numerous tax software providers also offer assistance and streamlined filing processes. Using tax software can significantly simplify the online tax return process.
• Who is affected: All self-assessment taxpayers are encouraged to file online. While exceptions may apply for those with specific disabilities or significant technological limitations, the trend is undeniably towards digital self assessment tax returns.

Changes to Allowable Expenses

Some allowable expenses for your self assessment tax return have been updated or clarified. It's crucial to review the latest guidelines to ensure accurate claims.

• Specific examples of expense changes: Changes may affect working from home allowances (consider the impact of the recent changes to the tax relief), travel expenses (particularly for mileage allowance), and other business-related costs. Always refer to the official HMRC guidance for the most up-to-date information on allowable expenses. [Link to official HMRC guidance on expenses]
• Impact on different professions: These changes impact various professions, including freelancers, contractors, sole traders, and the self-employed. The specific implications will vary depending on your profession and circumstances.
• Keeping meticulous records: Maintaining thorough records of all expenses, including invoices, receipts, and bank statements, is crucial for successful claims. Digital record-keeping can make this process easier and more efficient.

New Reporting Requirements for Certain Income Streams

Certain types of income now require more detailed reporting on your self assessment tax return. Failure to comply could result in penalties.

• Examples: Changes might affect reporting rental income, dividend income, cryptocurrency transactions, and other investment gains. The level of detail required is increasing to ensure greater transparency.
• Impact on taxpayers with these income sources: Taxpayers with these income sources must maintain even more accurate and detailed records to support their tax return claims. This includes details of transactions, dates, and amounts.
• Penalties for non-compliance: Failing to accurately report income can result in significant penalties from HMRC, including surcharges and interest. Understanding the new requirements is therefore essential for avoiding penalties.

Who is Affected by the HMRC Tax Return Changes?

These HMRC tax return changes affect a wide range of individuals and businesses.

Self-Assessment Taxpayers

This includes anyone who is self-employed, a freelancer, a contractor, or receives other untaxed income above a certain threshold. This is a broad category covering a wide spectrum of individuals, and understanding the implications is crucial.

Businesses

Businesses, particularly small and medium-sized enterprises (SMEs), need to be aware of changes to corporation tax and reporting requirements, particularly if utilizing the online tax return system.

Landlords

Changes impacting rental income reporting significantly affect landlords, requiring a more detailed accounting of rental income and expenses.

Investors

Those with investments, particularly in dividends or cryptocurrency, need to understand the updated reporting guidelines for accurate self assessment tax returns.

What to Do to Prepare for the HMRC Tax Return Changes?

Proactive preparation is key to navigating these HMRC tax return changes successfully.

Gather Your Records

Compile all necessary financial documents, including bank statements, invoices, receipts, P60s, and any other documentation relevant to your income and expenses. Organize these carefully to simplify the filing process.

Use Tax Software

Tax software can simplify the process and minimize errors. Many options are available, offering varying levels of support and features.

Seek Professional Advice

Consider consulting a tax advisor, accountant, or tax professional for complex situations or if you're unsure about any aspects of the changes. This is particularly important if you have multiple income streams or complex financial affairs.

Stay Updated

Regularly check the HMRC website for the latest updates and guidance on the self assessment tax return and related changes.

Conclusion

The recent HMRC tax return changes represent a significant shift in the UK tax landscape. Understanding these alterations is essential for self-assessment taxpayers, businesses, and individuals with various income streams. By gathering your records, using tax software, and seeking professional advice where necessary, you can navigate these changes successfully and ensure you file your HMRC tax return accurately and on time. Don't delay – take action now to prepare for the upcoming HMRC tax return deadline and avoid potential penalties. Staying informed about ongoing HMRC tax return changes is key to maintaining compliance. Start preparing your HMRC tax return today!