More than 600,000 to miss tax return deadline
Over 600,000 people are expected to miss Tuesday’s self assessment deadline, resulting in a £60m bumper haul of late penalties for HM Revenue and Customs.
Hundreds of thousands will be hit by an automatic £100 fine if they fail to file their tax return by midnight on 31 January.
The £100 penalty applies whether or not any tax is owed. If after three months the taxpayer still has not filed, they are then charged £10 a day. At the six-month mark there is a further £300 penalty.
Before the weekend, there were 2.7 million taxpayers who had yet to submit their tax return, according to data from HMRC shared with The Telegraph out of the total 12 million expected to file.
Research by Handelsbanken Wealth & Asset Management has found that over 600,000 self-employed workers will not file on time this year.
The bank estimates that there are 9.4 million workers in the UK who are either self-employed or earn an additional income on the side who therefore fall into the self assessment pool.
But there are many others who may not realise they need to complete a self assessment – including higher-rate taxpayers who paid into a personal pension last year or made a charitable donation with Gift Aid.
These individuals should complete a tax return in order to claim potentially thousands of pounds in tax relief. Parents earning over £50,000 must also declare their child benefits on their tax return and pay the “high income child benefit charge” to avoid late charges.
HMRC has said it will not be waiving penalties this year as it did during the pandemic. This is despite customer service issues that have created huge delays for some taxpayers ringing the tax office to ask for help filling in their tax return.
Seb Maley of Qdos, an insurance company for the self-employed, said: “The Government took a more lenient approach during covid – and HMRC removed late payment penalties for a month to give people a little breathing space – but this isn’t the case anymore. Put simply, the Treasury is desperate to raise tax revenue.
“Added to this, along with fines for missing the deadline and interest charged on the outstanding amount, the longer a tax bill goes unpaid, the higher the risk of an individual being investigated by HMRC.”
Those who owe tax and fail to pay it within 30 days of the deadline will face further charges of 5pc of the outstanding bill.
Sarah Hollowell, tax director of investment company Killik & Co, said HMRC may be willing to waive the fine if it decides the taxpayer had a “reasonable excuse” for filing late. “You may find details of what HMRC would consider as ‘reasonable’ on their website but generally, it would need to be a very serious illness or death,” she said
Taxpayers who believe they have a legitimate reason for failing to pay on time can make an appeal to HMRC.