3.8m taxpayers yet to file tax return with one week left until deadline

A £100 fine will be imposed on any taxpayer who fails to file their annual tax return after one week has passed, as reported by HM Revenue and Customs (HMRC).

HMRC has warned that about 3.8 million UK taxpayers still have to submit their taxes before January 31st, a slight increase compared to last year’s total of 3.4 million at the same point in time. Self-employed people and landlords make up an estimated total of 12.1 million taxpayers who are required to stick to self assessment rules for this current fiscal year; up until today, over 8.3 million individuals have already filed their taxes electronically for the 2022-23 fiscal year.

Last year, however, it is believed that around 2.7 million taxpayers paid the automatic penalty of £100 for late submission of their self-assessment returns which applies if they are not filed by the deadline as per the law.

Some people may be unaware that they need to file a tax return before the dateline of January 31st, and therefore can face penalties. These new filers could include parents claiming child benefit whose salaries crossed the £50,000 threshold for the first time in the 2022-23 tax year and who will have to repay some or all of their benefit through the high income child benefit charge.

They might be higher earners whose salaries topped £100,000 or pensioners who earned more than their savings allowance because of rising interest rates.

Alternatively,they could be working people whose side hustle earnings were above £1,000 during the tax year.

Due to pressure on HMRC phone lines, the availability of call agents has been reduced and only complex enquiries will be dealt with over the phone. All other enquiries will be directed to HMRC’s online services.

Myrtle Lloyd, HMRC’s director general for customer services, advised self assessment taxpayers to take action and get their return done. People can familiarize themselves with the process by checking out HMRC’s online resources on gov.uk.

If you are unable to pay your outstanding tax in full, you can set up a time to pay arrangement online without speaking to HMRC, as long as you owe less than £30,000.

When completing your tax return, it is important to include your bank account details so that HMRC can make a repayment quickly and securely without issuing a cheque.

Late tax returns incur penalties, including 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 three months, additional daily penalties of £10 per day, up to a maximum of £900, are added. After six months, a further penalty of 5% of the tax due or £300, whichever is greater, is added. After 12 months, another 5% or £300 charge, whichever is greater, is added.

HMRC will consider your reasons for not being able to meet the deadline. Those who provide a reasonable excuse may avoid a penalty. There are also additional penalties for paying outstanding tax late. These are 5% of that unpaid at 30 days, six months, and 12 months. Interest will also be charged on any tax paid late.

It is important to inform HMRC of any changes to your personal details or circumstances, such as a new address or name, or if you have stopped being self-employed or your business has closed. If you think you no longer need to complete a self-assessment tax return for the 2022 to 2023 tax year, you should tell HMRC before the deadline on 31 January 2024 to avoid any penalties.

Customers need to be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one.

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