Tax season can be a stressful time for sole traders, with deadlines looming and paperwork to be completed. 

One common question that comes up as that January 31st deadline gets closer is: how long does a tax return take? And how long will I have to wait to receive my tax refund? 

As a sole trader busy running your own business, you naturally want to know how much time you need to set aside for completing your Self Assessment tax return - and how long it will take HMRC to process. You just want to be able to tick it off your to-do list, receive any tax refunds you’re due and get your taxes paid. Job done for another year! 

In today’s article, we'll be giving you some clarity by exploring how long tax returns and tax refunds take - including the various factors that can impact processing time - from submitting the form itself to receiving your tax refund or final assessment.

Understanding the Self Assessment tax return process

First things first, it's essential to understand the Self Assessment tax return process for sole traders in the UK. 

A Self Assessment tax return (or Form SA100) is a document that sole traders submit to HMRC, detailing their income, business expenses and other relevant financial information for a specific tax year. 

HMRC then uses the information provided to calculate how much Income Tax and National Insurance you’re required to pay as a sole trader, and whether you’re due a tax refund. 

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How long does a Self Assessment tax return take to complete?

How long it takes you to complete your Self Assessment tax return as a sole trader depends on a range of factors, such as the size of your business, your experience with filing tax returns, how well you’ve maintained your financial records, and whether you’ve got professional help or are tackling your Self Assessment tax return on your own. 

It might take you just a few hours - if you’re a sole trader running a very small and straightforward business - but it could take you days or weeks if your business is a little more complicated. 

One way to speed up the process significantly is to consult a professional accountant or tax adviser, who will be able to walk you through the process step by step, or complete your tax return for you. With our new service for sole traders, CrunchONE, our experts will make sure your tax return is submitted quickly, accurately and on time. 

From there, the ball is in HMRC’s court - as you then have to wait for them to process your Self Assessment tax return. 

How long does it take HMRC to process Self Assessment tax returns and tax refunds?

HMRC aims to process online tax returns within 48 hours of submission, although paper returns generally take longer due to manual processing. 

And if you’re waiting for a tax refund, you might have to allow a few extra months for that to come in. This is because if you overpay tax, HMRC will deal with your repayment once they have processed your tax return. As a general rule, tax refunds in the UK can take up to twelve weeks to be processed by HMRC, and you might then need to wait up to another five weeks to actually receive your money.

However, it's essential to note that all of the timeframes mentioned above are target times and actual processing times may vary.

‍Let’s take a look at a few of the factors affecting HMRC’s processing time:

1. Whether you print or file your tax return digitally 

Filing a tax return digitally on HMRC’s website is much faster than submitting a paper return. Even the deadlines for the two are different! This year, if you’re submitting a paper tax return, you must submit it by midnight 31st October 2023, but if you’re filling out the form online, you must submit it by midnight 31st January 2024 - a good few months later.

On top of being a lot faster, electronic filing reduces the likelihood of errors and makes the process a lot easier for you, as specific sections of the form will appear or disappear depending on what you’ve answered in previous questions, so it’s easier to see which questions are relevant. 

2. The complexity of your tax return

How complicated your Self Assessment tax return is also plays a role in processing time. Simple returns with straightforward income and deductions may be processed more quickly than complex returns involving multiple sources of income, investments or self-employment income. Returns that require manual review or additional documentation may take longer to process.

3. The accuracy of your information

Submitting accurate and complete information is crucial for quick processing times. Errors or missing information can lead to delays, as HMRC may need to request additional documentation or clarification. Double-checking all entries and ensuring that supporting documents are included can help prevent these unnecessary delays.

4. The length of HMRC’s review

HMRC conducts their own review process, verifying information, performing calculations and cross-referencing data. Processing time varies based on return volume and system efficiency.

5. Tax season demand

Processing times may be longer during peak tax season when tax authorities are inundated with a high volume of returns. Filing your Self Assessment tax return early can help you avoid the delays associated with increased demand closer to the deadline. 

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Important deadlines that you need to know as someone self employed

Registering as self employed - October 5th

Paper tax returns - October 31st

Online tax returns - January 31st

Deadline for paying tax owed - January 31st**

**If you want HMRC to automatically collect tax you owe from your wages and pension (and only if you’re eligible to do so), you’ve got to submit your online tax return by 30th December.

Final thoughts

In short, it’s always best to get ahead and submit your Self Assessment tax return as early as possible, as the time it takes to process them can vary quite a bit.

When you’re filling out your Self Assessment tax return or claiming your tax refund as a sole trader, keeping track of deadlines, getting in there early and seeking professional help are all great ways to minimise delays and reduce any deadline-induced tax stress. 

That way, you can have a smooth tax return experience - and even expedite the process - so you can focus on what matters most as a sole trader: working on your business.