How Long Does a Tax Return Take? A Guide for Sole Traders

Luckily, we’re here to provide clarity. This guide will walk you through the Self Assessment tax return process, share insights on how long each stage typically takes, and offer practical tips to help you save time and avoid stress.

Understanding the Self Assessment Tax Return Process

If you’re self-employed in the UK, chances are you’ll need to complete a Self Assessment tax return (Form SA100). It’s HMRC’s way of collecting Income Tax and National Insurance Contributions for individuals whose taxes aren’t automatically deducted through PAYE (Pay As You Earn).

For sole traders, Self Assessment requires detailed reporting of your income, expenses, and other financial information related to your business. This ensures HMRC calculates your tax liability accurately based on the money you’ve earned, after any allowable expenses or deductions.

Submitting a return might seem straightforward if you’ve done it before. However, for those new to the process, understanding timelines, accuracy requirements, and filing methods is key to avoiding unnecessary delays.

How Long Does It Take to Complete a Self Assessment Tax Return?

The time it takes to complete your return can vary widely depending on several factors.

Key Factors That Influence Timing

1. Size and Complexity of the Business: A sole trader who sells products online with minimal expenses will complete a return far quicker than someone managing multiple income streams or investments.
2. Experience With Tax Returns: If you’re completing your first return, you’ll likely spend extra time learning the process, calculating expenses, and understanding what documents are required.
3. Quality of Financial Records: Accurate, organized records cut down on time spent gathering receipts, invoices, and financial statements. Without these, filing may take significantly longer.
4. Professional Help vs. DIY Filing: While completing your return independently may save money, hiring a tax professional can streamline the process, reduce errors, and save you time.

Estimated Times for Completion

• Simple Tax Return (minimal income/expenses): A few hours.
• Moderately Complex Return (multiple income streams or deductions): 1–2 days.
• Highly Complex Return (investment income, intricate deductions): Up to a week or longer.

If efficiency is crucial, enlisting the help of an accountant or tax adviser can make the process smoother and ensure your return is filed accurately.

How Long Does It Take HMRC to Process Tax Returns and Refunds?

Once you’ve completed your return, the clock shifts to HMRC. Here’s what to expect.

Processing Self Assessment Tax Returns

• Online Returns: HMRC typically processes online submissions within 48 hours.
• Paper Returns: Paper returns require manual processing, which can take up to 3 weeks or more.

Refund Timelines

If you’re due a tax refund, the timeline can vary depending on how you filed and when.

• Online Submissions: Refunds can take up to 12 weeks, with the payment itself taking an additional 5 working days to reach your account.
• Paper Submissions: Manual processing often results in longer refund times, sometimes extending beyond the standard 12-week period.

It’s important to note that these are target times, and actual processing may fluctuate based on workload or the complexity of your return.

Factors That Affect Processing Times

HMRC’s efficiency in handling returns and issuing refunds is influenced by a variety of factors.

1. Filing Method: Filing online is significantly faster. HMRC incentivizes online filing by giving you until January 31st to submit, compared to an earlier deadline of October 31st for paper filings.

2. Complexity of Your Return: If your tax return includes additional income streams or deductions, HMRC will need extra time to verify the information.

3. Accuracy of Information: Errors, omissions, or incomplete returns will cause delays. HMRC may contact you to request the missing information, further extending processing times.

4. Tax Season Demand: Filing closer to the January 31st deadline means your return is processed alongside millions of others. Filing earlier can prevent such delays.

How to Speed Up the Process

Here are practical tips to streamline the Self Assessment process and expedite your refund.

File Early: The closer you file to the beginning of the tax season, the faster your return will be processed. Early filing also reduces stress and gives you more time to address potential errors.

Keep Organized Records: Maintaining well-organized financial records throughout the year minimizes the time needed to gather documentation when it’s time to file. Use accounting software or apps to track expenses, store receipts, and manage invoices.

Seek Professional Help: Enlisting the expertise of a tax accountant or adviser can save time and improve accuracy. They’ll guide you through the process, ensure compliance with HMRC, and even help identify deductions you might miss on your own.

Important Deadlines for the Self-Assessment Tax Return

Knowing and meeting HMRC deadlines is critical to avoid penalties. Here’s a quick rundown of key dates for sole traders.

• October 5th: Deadline to register as self-employed with HMRC for the current tax year.
• October 31st: Deadline to submit paper tax returns.
• January 31st: Deadline to submit online returns and pay any tax owed for the prior year.
• December 30th: Deadline to opt for HMRC to automatically collect owed tax through PAYE (for eligible individuals).

Mark these dates on your calendar to stay ahead of the curve!

Avoid the Tax-Time Stress

Submitting your tax return doesn’t have to be a stressful, time-consuming process. By understanding the timeline, maintaining accurate financial records, and filing early, you can ensure a smooth experience.

If you’re overwhelmed, remember that seeking professional help is a worthwhile investment. Experienced accountants not only save you time but also ensure your returns are error-free and optimized for your financial situation.

For more tips and resources, download our free guide, "The Ultimate Tax Guide for the Self-Employed", and set yourself up for tax-season success.

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