Millions of taxpayers across the UK are facing a race against time to submit their Self-Assessment tax returns before the fast-approaching deadline. HM Revenue and Customs (HMRC) has revealed that approximately 5.65 million people had not filed their returns as of January 5, putting them at risk of automatic fines.
The January 31 Deadline and Key Risks
The final cut-off for filing an online tax return and settling any tax owed for the 2024-25 financial year is midnight on January 31. Personal finance analysts are issuing stark warnings that leaving the task to the last minute significantly increases the chance of missing the deadline, making costly errors, or failing to claim valuable allowances that could reduce the tax bill.
Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, highlighted a common pitfall. "Putting personal finance admin on the backburner is something many of us are guilty of," she said, "but leaving your Self-Assessment tax return until the final days of January puts you at risk of missing the deadline and receiving a fine." She noted that many people underestimate the time required to complete a return accurately, particularly if they have multiple income sources or complex tax reliefs to claim.
HMRC Service Issues and Who Needs to File
The pressure on last-minute filers was compounded this week when HMRC's helplines were temporarily unavailable due to a technical issue. Phone lines were closed from 11.40am on Thursday, January 15, before reopening fully at 2.15pm. During the disruption, taxpayers were directed to use digital services, raising concerns that those seeking urgent support during this peak period could struggle.
Not everyone needs to complete a Self-Assessment. Many individuals have tax deducted automatically via PAYE. However, you are likely required to file a return if you:
- Earned more than £1,000 from self-employment or rental income.
- Received untaxed income from tips, commission, or foreign sources.
- Had savings, dividend, or investment income above your allowances.
- Are a business partner or are claiming specific tax reliefs.
HMRC offers an online tool to check your obligation. It is crucial for first-time filers to have their Unique Taxpayer Reference (UTR) number ready, which can take up to 10 days to arrive by post after registration.
Updated Rules and Preparing to File
Recent changes mean some taxpayers may no longer need to submit a return. For instance, higher-rate pension tax relief can now be claimed without Self-Assessment, and earning over £150,000 does not automatically trigger a filing requirement for 2024-25.
To avoid errors, gather all necessary documents before starting, including P60s, payslips, records of rental income and expenses, pension statements, and details of charitable donations or capital gains from assets like cryptocurrency.
Experts strongly advise claiming all eligible allowances and reliefs, such as:
- Higher and additional-rate pension tax relief.
- The £1,000 trading allowance for casual income.
- Work-related expenses for uniforms or home working.
- Gift Aid on charitable donations.
Penalties, Payment Plans, and Planning Ahead
Missing the January 31 deadline triggers an immediate £100 penalty, with further fines accruing after three, six, and twelve months, potentially totalling over £1,600. Late payment also incurs interest, currently set at 7.75%.
Any tax owed must be paid by the deadline, regardless of whether the return is submitted. Payment options include the HMRC app, online banking, or Direct Debit. Those who cannot pay in full may qualify for a Time to Pay arrangement if they owe less than £30,000 and have filed their return.
Taxpayers can amend a submitted return if mistakes are found, and refunds can be claimed for up to four years after the end of the relevant tax year. With income tax thresholds frozen until 2031, experts suggest using the deadline as a prompt to plan ahead by maximising pension contributions, using ISA allowances, and checking tax codes for accuracy.
HMRC urges anyone uncertain about their position to check their personal tax account or make contact directly, rather than risk a penalty.
