Millions of taxpayers could be hit with a major £900 penalty from HMRC if they don’t take urgent action. Taxpayers who have not submitted their self-assessment tax returns risk a £10 a day fine from today.
Under the tax rules, self-employed workers should have submitted their self-assessment tax return for the 2023-24 tax year by January 31, 2025. If you submitted it after this date, you faced a £100 late filing penalty – even if you had no tax to pay.
If you haven’t submitted after three months, additional daily penalties of £10 per day are added, up to a maximum of £900. HMRC estimated that 1.1 million customers missed the initial self-assessment deadline on January 31 this year.
After six months, a further penalty of 5% of the tax due or £300 is then added – whichever is greater. After 12 months, another 5% or £300 charge is added.
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, six months and 12 months. If the tax remains unpaid after the deadline, interest of 8.5% is also be charged on the amount owed, in addition to the penalties.
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Claire Trott, Head of Advice at St. James’s Place, said: “Whilst completing a tax return is often a dreaded task, and one may choose to put off, getting it sorted now could save you from significant financial penalties down the line.”
“It’s important to note that anyone who is currently registered for self-assessment is required to submit a return, whether they owe tax or not, so if you’re in this position, it’s crucial you don’t ignore reminders or warnings from HMRC.”
If you are yet to file your self-assessment tax return, then filing now won’t remove any existing fines, but it will stop further charges from building. The quickest way to file is through HMRC’s online portal.
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Trott noted that speaking to a financial adviser may be worth the cost for those with complex finances, adding: “While the process may seem daunting, there are plenty of tips and guidance available on the HMRC website, and if your finances are particularly complex, speaking to a financial adviser is always a good option for those who are able.”
She also explained “the most important thing is not to rush the return process as this could cause you to leave out vital information that could result in paying more tax than necessary.”
Most UK taxpayers have their taxes deducted automatically from their wages, pensions or savings, and won’t need to file a tax return. But tax returns are due from individuals or businesses that haven’t had tax automatically deducted, or that have earned extra untaxed income.
You normally need to file a self-assessment tax return if you’re self-employed and your income hasn’t had tax automatically deducted, or if you’ve earned extra cash outside of your normal employment that has not been taxed.
You can also check online through the HMRC website to see if you need to send a tax return.
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