One Million People Miss HMRC Tax Return Deadline
An astounding one million individuals have missed the HMRC tax return deadline and now face potential penalties, according to figures released by HM Revenue and Customs (HMRC). While this number is significant, it is notably lower than the 11.48 million who successfully filed on time.
Key Stats and Insights:
– Deadline Rush: On the final day for 2024-25 tax returns, 27,456 people submitted their forms in the last hour, just before midnight Saturday.
– Peak Filing Time: The busiest period for online self-assessment filings was between 17:00 GMT on Saturday.
– Final Day Statistics: A total of 475,722 individuals filed on the last day, contributing to the overall figure of approximately 11.5 million submissions.
Penalties for Missing the Deadline
Those who failed to file their returns will incur an automatic penalty of £100. Myrtle Lloyd, HMRC’s chief customer officer, emphasized the importance of timely submissions, stating: “Thank you to the millions 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.”
Who Needs to File?
While millions have tax automatically deducted through PAYE (pay-as-you-earn), self-assessment is necessary for those with multiple income sources, such as:
– Self-employment earnings exceeding £1,000 in the 2024-25 financial year.
– Income from letting out property or land.
Certain individuals may not be required to file this year, including:
– Those earning more than £150,000, where high income was previously the sole reason to file.
– Individuals who have switched to paying the high income child benefit charge through PAYE.
Consequences of Late Filing
Missing the filing deadline incurs the following penalties:
– Immediate Penalty: A fixed £100 fee, applicable even if there’s no tax to pay or if the tax owed is settled on time.
– Daily Penalties: After three months, an additional daily penalty of £10 may apply, capping at £900.
– Six-Month Penalties: A further penalty of 5% of the tax due or £300 (whichever is higher) after six months.
– Twelve-Month Penalties: Another potential charge of 5% or £300, depending on which is greater.
– Additional Late Payment Penalties: 5% of any tax unpaid at 30 days, six months, and twelve months may also be charged.
Avoiding Penalties
HMRC will consider reasonable excuses for late submissions, which could allow certain individuals to avoid fines. Tax analysts offer the following advice for those appealing penalties:
– Pay the Initial Penalty: As Charlene Young, senior pensions and savings expert at AJ Bell, points out, paying the initial fine can prevent additional interest from accruing should an appeal be unsuccessful.
– Explore Payment Plans: If you’re unable to contest the penalty but still owe money, consider arranging a payment plan to manage your tax obligations effectively. Avoiding the issue is not advised.
Conclusion
With one million people missing the HMRC tax return deadline, the consequences can be costly. It’s crucial for individuals to understand their filing requirements and the potential penalties for late submissions. Filing promptly not only minimizes penalties but also helps avoid interest on unpaid tax. Ensure your finances are in order and stay informed to prevent falling behind in future tax years.