Millions of Brits could be getting a less-than-welcome Valentine’s gift from HMRC in the form of £100 fines in February if they miss the January 31 tax deadline for self-assessment tax returns. After thousands spent their new year’s day filling out their returns and paying their bill, new HMRC states estimate 5.4 million people are still to submit.
With barely three weeks until the deadline, Alastair Douglas, CEO of TotallyMoney, particularly warned people selling items online, either secondhand or through their own home business, as they could be liable to submit a return and pay this tax bill for the first time. The expert warned: “If you’re unsure if you need to file a tax return, it’s worth double checking, especially if you’ve been selling items on apps like Etsy, Ebay or Vinted, or if you’ve made money from investments, including rental properties, crypto and even tips or commission.”
Essentially, this deadline is applicable to anyone who has earned an income above a £1,000 that was not taxed or came from outside of their usual taxed income. However, there are some exceptions, according to MSE, these are the main groups that will need to file their tax return before the deadline:
- Self-employed workers
- Earning more than £150,000
- Claiming Child Benefit and earning more than £50,000 a year for high income Child Benefit charge
- Earning money from renting out property, tips, commission and other untaxed income including selling goods or services online
- Earning £10,000 or more before tax on savings, investments, shares or dividends
- Earning income abroad
- Need to pay Capital Gains Tax
- Receiving income from a trust
- You filed a self-assessment tax return in 2022/2023 – unless you or the HMRC has flagged that you no longer need to
It’s worth noting that although the high-income Child Benefit charge has been raised to £60,000, the £50,000 limit still applies to the 2023/2024 tax year. If in doubt, you can always use the Government’s free tool to check if you’re liable to file a tax return.
People have until 11:59pm on January 31, 2025 to submit their return and make payments towards their tax bills for the 2023/2024 tax year. After this they could face a fine of £100, which also has interest charges of 7.25%. After three months this increases with a daily additional penalty of £10 up to a £900 maximum.
If you leave the issue for six months you face a further penalty of 5% of the tax due or £300, whichever is greater and this penalty happens again at the 12-month mark. In total, ignoring just a £100 tax bill until next January could cost you £1,700 without including any of the interest charged on late payments.
Experts at Money.co.uk explained that to start a self-assessment tax return, you need to register with HMRC if you haven’t already, which can take up to 10 working days to complete. Then you’ll need to gather documents relevant to why you need to submit a self-assessment return such as your P60 or P45, bank statements, rental income records and information on your dividends or capital.
Then you can simply follow the instructions set out on the HMRC website. The experts added: “The system will guide you through various sections that apply to your situation. Be accurate and honest with the information you provide. The online system will calculate the tax you owe based on your provided information.”
Once your return is submitted, you also have to make payments on your tax bill before January 31. This can be done through online or telephone banking, at your bank or building society but you’ll need to bring your paying-in slip from HMRC or through the post with a cheque. The experts advised: “After you’ve paid, keep a record of the payment. HMRC may need proof of payment in case of any discrepancies.”