The number of self-assessment tax returns filed online has increased to almost seven million, according to figures from HM Revenue & Customs. This figure is an increase of seven percent of the returns filed online in 2010. Over half a million taxpayers waited until the deadline of 31st January 2011 to submit their completed tax return. A huge 78 percent of all tax returns are now filed online, which is in keeping with targets set by HMRC. The busiest hour for the submission of tax returns online was between four and five pm on 31st January 2011, with over 49,000 submitted in that hour alone.
Although online filing of your self-assessment tax return is much easier for many, there are some people who prefer to complete a paper return, which has to be submitted by 31st October each year. The system used for online filing has improved since its introduction 10 years ago, which has encouraged an increased number of taxpayers to file online.
For small businesses including sole traders, the introduction of online filing has made the outsourcing of their accounts and self-assessment to an online accountancy a much more cost effective solution. The preparation of accounts and the tax return can be done using real time information which is submitted to their accountant firm in a timely manner. This abolishes the need for submission using estimated figures, which can result in an unexpected underpayment of tax. Online accounting combined with online submission of tax returns makes it possible to maximise return on investment.