Just this year, over a million people failed to submit their annual return to Her Majesty’s Revenue and Customs (HMRC). As a consequence, they are under threat of financial penalties. Millions more taxpayers were left to rush at the last minute due to the harsh cutoff of January 31. Just on that last day, it was 475,722 submissions out of about 11.5 million total submissions.
HMRC will charge a £100 first fixed penalty for failing to meet the deadline. This penalty can be charged regardless of whether you owe taxes or have paid the tax due by the deadline. Barring the rent for a few months, after three months the penalties can greatly increase. Further daily fines of £10 can be added, up to a ceiling of £900. Fail to file the return within six months, and an automatic 5% penalty starts accruing. You’ll have to pay a further penalty of 5% of the tax due or £300, whichever is greater. A similar charge applies after 12 months.
HMRC applies automatic penalties for late payment. You must pay a 5% monthly penalty on unpaid taxes beginning 30 days after the notice date, with additional penalties after six months and 12 months. Additionally, interest can be charged on the total owed if property taxes are not paid by their due date.
The pressure on taxpayers was palpable as the busiest hour for online self-assessment submissions occurred from 17:00 GMT on Saturday, with a significant rush noted in the final hour before the midnight cut-off for 2024-25 returns, which saw 27,456 individuals file their returns.
HMRC has previously claimed that it takes customers’ reasons for failure to meet the deadline into account when assessing penalties. It is obvious that the agency extorts tens of millions of pounds each year through these predatory fines.
“Thank you to the millions of people and agents who filed their self-assessment tax return and paid any tax owed by 31 January. Anyone who missed the deadline should file their return as soon as possible, as penalties and late payment interest may be charged.” – Myrtle Lloyd
Tax advocates are calling on people who didn’t file by last week’s deadline to act now. Charlene Young emphasized the importance of filing promptly, stating, “Although it involves shelling out cash, it avoids you paying interest on the penalty itself from the date it became due if you lose your appeal.”
She encouraged those who do not have a valid reason to appeal to make arrangements to pay their taxes. This would enable them to better collect and clear their dues. “It’s essential you don’t put your head in the sand,” Young added.
