HM Revenue and Customs (HMRC) has issued a critical warning to approximately one million taxpayers who missed the January 31 deadline for filing their self-assessment tax returns and paying any tax owed for the 2024/25 tax year. From March 3, HMRC will begin charging a penalty of 5% of the unpaid tax, marking a significant financial consequence for those who have not yet settled their obligations.
Understanding the Self-Assessment Deadline and Penalties
The deadline to file tax returns and pay any tax due was January 31, 2026. Individuals who failed to meet this deadline have already incurred an immediate £100 fine for late filing. However, the penalties escalate further if the tax remains unpaid. Starting March 3, which is 30 days after the deadline, HMRC will impose a 5% charge on the outstanding tax amount.
Escalating Penalties for Unpaid Tax
If the tax is still unpaid after three months, daily fines of £10 will apply, accumulating to a maximum of £900. At the six-month mark, a penalty of 5% of the tax owed or £300, whichever is greater, will be charged. This penalty is repeated at 12 months if the tax remains unsettled, creating a compounding financial burden for non-compliant taxpayers.
Recent HMRC data reveals that 475,722 taxpayers waited until the final day, January 31, to file their returns, with 27,456 submissions occurring in the last hour before midnight. Out of an expected 12 million filers for the 2024/25 tax year, over 11.48 million managed to file on time, highlighting the urgency for the remaining individuals to act promptly.
Who Needs to File a Self-Assessment Tax Return?
According to guidance from MoneyHelper.org.uk, you may be required to file a self-assessment tax return if you meet any of the following criteria:
- Your self-employment income exceeded £1,000 before tax relief claims.
- You earned more than £2,500 from renting out property (contact HMRC if between £1,000 and £2,500).
- You received over £2,500 in untaxed income, such as tips or commission.
- Your income from savings or investments was £10,000 or more before tax.
- You need to pay Capital Gains Tax on profits from assets like shares or a second home.
- You are a company director, excluding non-profit organisations like charities.
- You or your partner's income exceeds £60,000 while claiming Child Benefit.
- You have taxable income from abroad or live abroad with UK income.
- Your total taxable income is over £150,000.
- You are a trustee of a trust or registered pension scheme.
- Your State Pension was your sole income and exceeded your personal allowance.
- You received a P800 from HMRC indicating underpaid tax from the previous year.
To confirm whether you need to file, you can use the online checker available on the HMRC website.
HMRC's Advice for Late Filers
Myrtle Lloyd, HMRC Chief Customer Officer, emphasised the importance of timely action: “Thank you to the millions of people and agents 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.”
She further advised that HMRC digital channels are the quickest and easiest method for managing tax affairs, recommending individuals search 'self assessment' on GOV.UK for more information.
With the March 3 deadline looming, taxpayers are urged to file their returns and settle any dues immediately to avoid escalating fines and additional interest charges. This warning serves as a crucial reminder of the financial risks associated with missing tax deadlines, particularly for the estimated one million individuals still at risk.
