The tax office sets an annual deadline of January 31 for the millions of people who need to submit a self-assessment tax return to do so online and pay any tax they owe.
Most people who are in PAYE employment (e.g. work for a company and have tax deducted from your wages) don’t need to file a tax return, but there are many circumstances which mean you need to – and some are not immediately obvious.
For example, those who claim Child Benefit and earn more than £50,000 do need to file a self-assessment tax return as they are liable to pay the High Income Child Benefit Charge.
Those who earned more than £1,000 on any business, even a side hustle or selling on eBay, also need to submit a tax return, as do landlords, freelancers and contractors.
The deadline for self-assessment is this Friday, January 31, and HM Revenue and Customs has warned that it will issue £100 fines to late payers or non-payers as well as charge 7.25% interest on any outstanding monies owed.
HMRC says: “Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.
“Tax is usually deducted automatically from wages and pensions. People and businesses with other income must report it in a Self Assessment tax return.
“How much tax you pay will depend on the Income Tax band you’re in. There’s a different rate for Capital Gains Tax if you need to pay it, for example you sell shares or a second home.
You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied:
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you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
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you were a partner in a business partnership
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you had a total taxable income of more than £150,000
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you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
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you had to pay the High Income Child Benefit Charge
You may also need to send a tax return if you have any untaxed income, such as:
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money from renting out a property
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tips and commission
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income from savings, investments and dividends
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foreign income
If you’ve sent a return in the past but no longer need to, you still need to inform HMRC, as failure to do so when the tax office is expecting a return could still land you with a fine.
HMRC adds: “You must tell HMRC if you believe you no longer need to send a tax return.
If HMRC agrees, they’ll send a letter confirming you do not need to file a return.”
According to financial guru Martin Lewis, as of last week there were still an alarming 3.8M people in the UK who need to file a self-assessment tax return who had not yet done so.
He said on his ITV Martin Lewis Money Show Live: “I spoke to HMRC today, there were 5.4M people who hadn’t done it at the beginning of the month, there are still 3.8M people who need to do it who haven’t done it, that is a lot of people, people.
“So do not delay it, the phone lines get busier it gets tougher if you have a problem.
“If you have a self-assessment tax return to do, get it done. It’ll make your life easier.”
HMRC has warned people about the deadline this week, adding: “You need to pay the tax you owe by midnight January 31, 2025.
“There’s usually a second payment deadline of July 31 if you make advance payments towards your bill (known as ‘payments on account’).
“You’ll usually pay a penalty if you’re late. You can appeal against a penalty if you have a reasonable excuse.
“You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill.
“You’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late.”
