An estimated 1.1 million people have missed the self-assessment tax return deadline, according to HM Revenue and Customs (HMRC). This means they now face financial penalties, unless they can provide a valid excuse for their late submission.
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What Happens If You Missed the Deadline?
HMRC has outlined the penalties for failing to file a tax return on time. Even if no tax is owed, individuals who missed the 31 January cut-off will incur charges:
- £100 immediate penalty for missing the deadline
- Daily penalties of £10 per day (after three months, up to £900 maximum)
- Six-month penalty: Either 5% of the tax due or a £300 fine (whichever is greater)
- 12-month penalty: Another 5% of the tax due or a £300 fine, whichever is higher
There are also penalties for late tax payments, with interest accruing over time.
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Who Needs to File a Self-Assessment Tax Return?
The self-assessment process is required for individuals who:
- Are self-employed
- Have more than one source of income
- Earn from rental properties, savings, or investments
- Have income above a certain threshold not taxed at the source
Last-Minute Filers and IT Issues at Barclays
Despite the large number of late filers, over 11.5 million people successfully completed their tax return on time. Interestingly, 31,000 taxpayers submitted their return within the final hour before the deadline.
However, some people may have struggled to make tax payments due to IT issues at Barclays. While the payment deadline was 31 January, late payment penalties do not apply until 1 March. Barclays has assured customers that no one will suffer financially due to these technical issues.
What If You Have a Valid Excuse?
HMRC allows individuals to appeal penalties if they have a reasonable excuse for missing the deadline. However, an appeal can only be made after submitting the self-assessment tax return.
Appeals can be filed by either:
- Submitting an official form
- Writing a letter to HMRC explaining the reason for the delay
HMRC Urges Late Filers to Act Quickly
Myrtle Lloyd, HMRC’s director general for customer services, has advised those who missed the deadline to submit their return as soon as possible to avoid further penalties.
New Rules for Online Sellers: What You Need to Know
For the first time, new regulations require online platforms like eBay and Vinted to report sellers’ earnings to HMRC. These rules apply to individuals who:
- Sold 30 or more items
- Earned at least £1,700 in sales
HMRC will cross-check this data with tax returns to ensure compliance. However, this does not mean there is an additional tax for these sellers—just increased transparency to prevent tax evasion.
Phone Line Complaints and HMRC’s Response
Recently, HMRC faced criticism from MPs over allegations of providing poor customer service to encourage taxpayers to use online resources instead of calling. Chief executive Jim Harra denied these claims, calling them “completely baseless.”
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How to Avoid Penalties Next Year
To prevent future penalties, taxpayers should:
- Keep accurate records of all earnings and deductions
- Submit their self-assessment early to avoid last-minute stress
- Set up reminders for key deadlines
- Use HMRC’s online tools for guidance
By planning ahead, taxpayers can avoid costly penalties and ensure compliance with HMRC regulations.
Final Reminder: If you missed the deadline, act immediately to file your return and settle any outstanding tax to minimize financial penalties.
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