Phone Lines Stay Open as Tax Return Deadline Approaches
14 hours ago
Kevin Peachey, Cost of Living Correspondent
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As the self-assessment tax return deadline approaches, the UK’s tax authority is ramping up support by keeping phone lines open and extending webchat services. Millions of self-employed individuals and those with multiple income sources must file their 2024-25 tax returns online by the end of January. In response to the last-minute rush, HM Revenue and Customs (HMRC) has increased its Saturday support, acknowledging that last year, approximately 1.1 million people missed the cutoff.
Why Are Tax Returns Important?
Submitting a tax return is crucial for the following reasons:
– Failure to file by the deadline may result in an automatic £100 fine, with potential for additional penalties.
– Reasonable excuses that might help avoid fines include serious illness or recent bereavement. Unique excuses, like being up a mountain or on a yacht, have been cited in the past.
Who Needs to File a Tax Return?
Not everyone has to submit a tax return. The requirement typically applies to:
– Individuals earning over £1,000 in the 2024-25 financial year from self-employment, renting out property, or land.
– Those who previously filed due to high income but now earn more than £150,000 only from PAYE may not need to file this year.
Missed tax relief opportunities may also occur. Sir Steve Webb from consultancy LCP estimates that around 800,000 higher and additional rate taxpayers could be leaving money on the table by not declaring personal pensions or other relief at source schemes.
The Penalties for Late Filing
Filing your self-assessment tax return is only part of the process. You must also ensure any tax owed is paid by January 31. Here are the potential penalties for missing the deadline:
– Initial £100 Fixed Penalty: Applied even if no tax is due.
– After Three Months: Daily penalties of £10 may accrue, reaching a maximum of £900.
– After Six Months: An additional penalty of 5% of the tax due or £300, whichever is higher.
– After Twelve Months: Another 5% or £300 charge applies, whichever is greater.
– Late payments may also incur interest charges, adding to the financial burden.
HMRC will consider each claimant’s reasons for late filing, and those with a valid excuse may avoid penalties.
Important Support Services Available
For those needing assistance, HMRC has made substantial enhancements to its support systems:
– Webchat Expansion: Webchat availability has increased to ten times its usual Saturday capacity, ensuring support is more accessible than ever.
– Extended Helpline Hours: For the first time, the telephone helpline will be available from 09:00 GMT to 16:00 GMT on weekends. However, due to anticipated high volumes, expect longer wait times.
Safeguarding Against Scams
As tax season approaches, be vigilant. Scammers often impersonate HMRC, making fraudulent claims regarding unpaid bills or fake rebate offers. Always verify communications and report suspicious activity.
Upcoming Changes: Digital Overhaul
Starting in April, taxpayers with over £50,000 in gross income from self-employment or rental income must comply with Making Tax Digital regulations, which will replace traditional self-assessment methods:
– Taxpayers will need to maintain digital records using approved software and provide quarterly income and expense summaries to HMRC.
– The thresholds will decrease to £30,000 in April 2027 and further to £20,000 by April 2028.
“Making Tax Digital represents the most significant change in tax regulations since self-assessment,” said Victoria Todd from the Low Incomes Tax Reform Group, urging taxpayers to prepare promptly.
Filing your tax return is essential, and with support readily available, there’s no need to delay. Take the necessary steps to avoid penalties and safeguard your financial wellbeing this tax season.