What's Happening?
With the Self Assessment deadline approaching on January 31, HM Revenue and Customs (HMRC) is urging taxpayers and agents to file their returns promptly to avoid penalties. As of now, 8.6 million people
have already submitted their returns for the 2024 to 2025 tax year. However, 3.3 million taxpayers are yet to file. HMRC emphasizes the importance of filing on time to avoid an automatic £100 penalty. The agency offers various resources on GOV.UK, including guidance, webinars, and YouTube videos, to assist taxpayers. Additionally, HMRC's online services are available 24/7, and the quickest way to pay any owed tax is through the free HMRC app. Myrtle Lloyd, HMRC's Chief Customer Officer, advises taxpayers to file early to ensure peace of mind and to arrange payment if necessary. The deadline falls on a Saturday, and HMRC will provide webchat support through its Online Services Helpdesk on that day.
Why It's Important?
Filing tax returns on time is crucial to avoid financial penalties and interest charges. The initial penalty for late filing is £100, with additional daily penalties accruing after three months. These penalties can significantly increase the financial burden on taxpayers. Moreover, timely filing ensures compliance with tax regulations and helps maintain a good standing with tax authorities. For sole traders and landlords with qualifying income over £50,000, the upcoming requirement to use Making Tax Digital (MTD) for Income Tax from April 2026 adds another layer of importance to staying current with tax obligations. This transition to digital tax filing aims to streamline the process and reduce errors, but it also requires taxpayers to adapt to new systems and procedures.
What's Next?
Taxpayers who miss the January 31 deadline may face penalties unless they have a reasonable excuse. HMRC will consider such excuses on a case-by-case basis. For those struggling to pay their tax bill, HMRC offers the option to set up a payment plan online. Looking ahead, the implementation of Making Tax Digital for Income Tax in 2026 will require affected taxpayers to submit quarterly summaries of their income and expenses. This change underscores the importance of familiarizing oneself with digital tax filing systems in advance. Additionally, taxpayers should remain vigilant against scams, as HMRC will never request personal or financial information via text or email.
