With the critical January 31 deadline for Self Assessment tax returns rapidly approaching, financial expert Martin Lewis has issued an urgent warning to taxpayers who may miss the cut-off. He has shared a crucial strategy to help mitigate the substantial penalties and interest charges that HMRC automatically applies to late submissions.
The Immediate £100 Penalty for Missing the Deadline
Martin Lewis emphasises that anyone required to file a tax return by HMRC must submit it immediately, regardless of whether they believe they owe any tax. The system triggers an automatic £100 penalty the moment the deadline passes at midnight on January 31, even for a delay of just one minute. This initial fine is unavoidable for late filers, making timely action essential.
Key Tip to Reduce Interest on Late Payments
For those who cannot complete their full tax return documentation in time, Lewis advocates a specific approach to limit financial damage. He strongly recommends making an approximate payment to HMRC based on a rough estimate of what is owed. This proactive step can significantly reduce the 7.75% interest rate charged on late tax payments from the due date.
"Even if you cannot complete the form in time, have a rough guess of what you owe and pay that," advised Mr Lewis. This estimated payment helps lower the accumulating interest, providing some financial relief while you finalise your accurate return.
Who Needs to File and the Risks of Last-Minute Action
The requirement to file a Self Assessment return applies to several groups, including self-employed individuals who earned over £1,000 between April 2024 and April 2025. It also affects higher-income earners who must repay a portion of their Child Benefit. Leaving the process until the final days carries significant risks, as HMRC's phone lines become extremely congested and professional accountants are often fully booked, potentially leaving taxpayers without support.
Escalating Penalties for Continued Non-Compliance
Financial penalties increase sharply if the return remains unfiled. After the initial £100 fine, daily charges of £10 begin if the submission is more than three months late. At the six-month mark, further penalties of £300 or 5% of the tax due are added to the total. Additionally, separate late payment penalties of 5% are applied at 30 days, six months, and twelve months after the deadline.
Taking decisive action now is crucial to prevent a manageable tax bill from spiralling into a much larger debt due to these avoidable surcharges. Seeking help early ensures you can gather necessary documentation without the intense stress of the looming midnight deadline.
