HM Revenue and Customs (HMRC) is poised to begin issuing automatic £100 penalties in just two weeks, targeting millions of self-employed individuals and higher earners who fail to meet the critical self-assessment tax return deadline.
The January 31 Deadline is Fast Approaching
The final date for submitting online tax returns for the 2024/25 tax year is January 31, 2026. With the window closing, financial experts are issuing urgent reminders to taxpayers to complete their returns to avoid immediate financial penalties. Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group, highlighted the pressure many are under as the cutoff point nears.
"While tax returns certainly aren't known for being fun, not doing them on time can be surprisingly costly," Mr Ambery stated. He confirmed that HMRC will charge a £100 fine for anyone who misses the initial January 31 deadline, even if they have no tax to pay or pay their bill on time.
Key Groups at Risk of Penalties
Ambery pointed out that the deadline is especially crucial for families receiving Child Benefit. "This is particularly relevant for families claiming child benefit, where even a small increase in income can leave individuals and households subject to the High Income Child Benefit Charge (HICBC) and create the obligation to submit a return," he explained.
Alastair Douglas, CEO of TotallyMoney, echoed the warning, noting that millions need to complete the process this month. He also advised those requiring assistance from HMRC's helpline to act quickly. "Lines are likely to be at their busiest nearer to the end of the month, and during the middle and latter parts of the day. So, if you need help with your return, it’s best to get it sooner, rather than later," Douglas said.
Escalating Costs for Late Filers and Payers
The initial £100 fine is just the beginning of potential charges for latecomers. If a return is up to three months late, the penalty remains at £100, but further daily penalties can accrue after that. Additionally, there are separate charges for late tax payments.
Douglas emphasised the compounded financial impact: "Cracking on with your tax return might not only save you time, but also money. That’s because the taxman will start handing out £100 fines to anybody who files their return up to three months late and will charge a late payment interest rate of 7.75 per cent per year."
With the clock ticking, the message from industry professionals is clear: submitting your self-assessment return before the January 31 deadline is essential to avoid unnecessary fines and interest from HMRC under the current Labour government.
