More than 600,000 people will miss Tuesday’s self-assessment deadline, resulting in a £60m bumper haul of late penalties for HM Revenue and Customs.
If they do not file their tax returns by midnight on 31 Jan, hundreds of thousands could be subject to an automatic 3100 penalty.
The £100 penalty is applicable regardless of whether any tax is owed. After three months, if the taxpayer has not filed, they will be charged £10 per day. A further £300 penalty is added at six months.
According to data shared by HMRC with The Telegraph, there were 2.7 Million taxpayers still waiting to submit their tax returns before the weekend. This is in addition to the 12 million who are expected to file.
Handelsbanken Wealth & Asset Management found that more than 600,000 self-employed workers won’t file their taxes on time in 2018.
According to the bank, 9.4 million UK workers are self-employed or make an extra income. These people are included in the self-assessment pool.
There are many other people who might not realize they must complete a self-assessment, including taxpayers at higher rates who have contributed to a personal pension or Gift Aid.
To claim tax relief, these individuals must complete a tax return.
HMRC said that it won’t be waiving penalties as it did during the pandemic. This is despite customer support issues which have caused delays for many taxpayers calling the tax office to request help with their tax returns.
Qdos is an insurance company for self-employed. Seb Maley stated that the Government used a more relaxed approach to covid. HMRC reduced late payment penalties by one month to allow people some breathing room. But this is no longer the case. Simply put, the Treasury wants to increase tax revenue.
“Additionally, there are fines for not paying the deadline and interest on the outstanding amount. The higher the risk that an individual is being investigated by HMRC, the more tax bills remain unpaid.”
Additional charges will be applied to those who fail to pay tax within the due date.
Sarah Hollowell, tax director at Killik & Co said that HMRC might waive the penalty if the taxpayer has a “reasonable excuse for late filing.” You can find information on what HMRC considers reasonable,’ but it would generally need to be a very grave illness or death,” she stated.
HMRC can appeal to taxpayers who feel they have a valid reason for not paying on time.
