More than 300,000 self-employed people have suggested that they will miss the January 31 deadline for completing self-assessment tax returns and paying any money owed, according to new research from Handelsbanken Wealth and Asset. Management
HM Revenue and Customs (HMRC) data revealed that, as of January 23, around 5.4 million people were yet to file their returns for the 23/24 tax year.
This means that only 66% (8.6 million) will have filed their tax return on time.
Alastair Douglas, chief executive of TotallyMoney, said HMRC would automatically fine taxpayers £100 for not submitting a return on time.
He said: “The taxman will be waiting to dish out £100 fines as soon as the clock strikes midnight. After that, you’ll have three months of breathing space before HMRC issues daily penalties of £10, up to a maximum of £900, with fines getting more severe after that.”
Anyone struggling to make their full tax payment might be eligible for a budget payment plan that lets you set up weekly or monthly direct debits.
To do this, you’ll just need to sign in to your account, and follow the prompts. You’ll just need to have your unique tax reference number ready, along with your bank account information, and details and of any previous payments you’ve missed.
Douglas said anyone having difficulty with setting up an online plan should phone HMRC on 0300 200 3820.
He warned: “Just remember that wait times are likely to be longer the closer we get to the deadline, and at lunchtime and evenings. They’ll ask you a series of questions, so make sure you have the information ready. These will include: how much you can afford to repay each month, if there are other taxes you need to pay, your earnings and expenditure, and details of your savings and investments.
“It’s also worth remembering that HMRC will charge interest at 7.25% on late payments, meaning the money owed can snowball, and especially if you start incurring additional fines.”
Handelsbanken Wealth & Asset Management said many self-employed workers continue to struggle with completing self-assessment returns.
Its research found that only 23% of taxpayers felt confident about completing their self-assessment form compared to 30% this time last year, a drop of 7%.
Mark Collins, head of tax at Handelsbanken Wealth & Asset Management, said: “Customers filing their returns late risk a £100 fine, even if there is no tax to pay. Penalties can mount up if returns are more than three months late, with additional penalties for paying outstanding tax late.”
You may need to file a tax return if:
– you are on the state pension and earned other income – such as renting a property
– you are a higher rate taxpayer and pay into a pension
– you make money via a side hustle such as selling on eBay or Vinted
– if you have filled in a tax return in the past
Anyone with queries about self-assessment payments or refunds, or who need help completing their tax return, can visit a dedicated page on the HMRC website: https://www.gov.uk/browse/tax/
