5.4 million yet to file tax return; Penalties loom as deadline nears

With less than a month to go, the countdown is on for 5.4 million customers who still need to complete and pay their Self Assessment and avoid penalties, HM Revenue and Customs (HMRC) has warned.

Thousands of taxpayers have already done so by completing their tax returns before the fizz was barely flat on New Year’s Day. HMRC has revealed that more than 24,800 people filed on 1 January. A further 38,000 had even squeezed theirs in before the bells on 31 December, with 310 filing between 23:00 and 23:59.

Anyone required to file a tax return for the 2023 to 2024 tax year who misses the 31 January 2025 deadline could face an initial late filing penalty of £100.

“We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest,” Myrtle Lloyd, HMRC’s director general for customer services, said.

“The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘Self Assessment’ to get started now.”

Some 97 per cent of customers now file online and one benefit is that they don’t have to complete it all in one go – they can save what they have done and pick it up again later.

Once a tax return is filed, payments can also be made quickly and securely through the HMRC app. Customers can set up notifications in the app to remind them when payments are due, so they don’t need to worry about missing deadlines or penalties. Information about the different ways to pay, can be found on GOV.UK.

HMRC has a wide range of resources online including a series of video tutorials on YouTube, help and support on GOV.UK, to support customers in completing their tax return.

For people who can’t meet the tax return deadline, HMRC will treat those with reasonable excuses fairly if they tell the agency before 31 January.

The penalties for late tax returns are:

• an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
• after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. If tax remains unpaid after the deadline, interest will also be charged on the amount owed, in addition to the penalties above.

If someone regularly sells goods or provides services through an online platform, they may need to pay tax on their income. Customers can find out more about selling online and paying taxes on GOV.UK by searching ‘online platform income’ or by downloading the HMRC app. The guidance will help them decide if their activity should be treated as a trade and if they need to complete a Self Assessment tax return.

You also may need to file a return if you:

• are newly self-employed and have earned gross income over £1,000
• earned below £1,000 but wish to pay Class 2 National Insurance Contributions voluntarily to protect your entitlement to State Pension and certain benefits
• are a new partner in a business partnership
• have received any untaxed income over £2,500
• receive Child Benefit payments and need to pay the High Income Child Benefit Charge because you or your partner earned more than £50,000

HMRC also urged taxpayers to be wary of criminals who use emails, phone calls and texts to try to steal information and money. To stay protected, HMRC advises individuals to search for ‘HMRC tax scams’ on GOV.UK, where they can find a comprehensive checklist to help identify whether a communication is genuine or a scam, before sharing personal or financial details.