Online self-assessment tax returns due by midnight
Faarea Masud
Business Reporter
Getty Images
Millions face paying a £100 penalty if they do not file their tax return
Millions of people still have not filed their online self-assessment tax returns for which the deadline is midnight, meaning they could be fined £100, HMRC has warned.
Over 3 million people who risk the penalty are being advised to go online for help and advice, and to use the app to pay any outstanding tax once their return is submitted.
New rules now mean that those selling around 30 items on online platforms such as eBay and Vinted will now have their sales information shared with HMRC which will be assessed against their tax returns.
Those without a reasonable excuse for missing the deadline will be issued with a penalty that increases the longer is it outstanding.
If the midnight deadline is missed, an initial £100 fixed penalty is issued, which applies even if there is no tax to pay.
“Customers’ reasons for not paying their tax bill or arranging a payment plan by the deadline will be considered individually,” said Myrtle Lloyd, HMRC’s customer services director.
After three months of not paying tax due, additional daily penalties of £10 per day are applied, up to a maximum of £900, with further penalties at six months and a year, including added interest on top.
Around 8.6 million people have already declared their tax for the year 2023-2024, including small businesses and those with extra income outside of their jobs.
‘Intimidating tax system’
“Tax generally can be quite an intimidating topic,” accountant Benedicta Egbeme, founder of BeniRatio Finances, told the BBC, adding that even though the UK tax system is “complex and daunting,” people should not “bury their head in the sand” because of the fear from not engaging with the system.
“If you know you are liable to complete the return and have no ‘reasonable excuse’ and you also have a rough idea of how much you may need to pay – this may be based on previous years returns – you can choose to make a payment for tax even without submitting to avoid the interest charge.”
“You can then proceed to get your calculations done and make a submission as soon as possible for the correct amount. Of course any shortfall will need to be paid and any over payments will ultimately be refunded to you by HMRC”, she said.
Ms Egbeme said reasonable excuses not to submit on time include: bereavement, being sick/unwell to the point of being admitted in hospital or dealing with a life-threatening illness.
Other reasons that will taken into account are software failure, issues with your personal computer, HMRC online services, and “destruction of property, files, paper work by fire, flood or theft.”
She says you can appeal the fine via an appeal form or writing HMRC a letter – which may help the fine to be written off, but it still means you have to submit a return.
“In fact HMRC do not consider appeals until your tax return has been submitted and payment has been made,” she says.
Ms Lloyd added that people should always include their bank details as part of their tax return to ensure swift repayment if any is due.
HMRC is also warning that customers need to be aware of the risk of falling victim to scams which can increase during tax deadlines, and that people should never share their HMRC login details with anyone.
HMRC recently denied running a “deliberately poor” phone service in an attempt to push taxpayers to seek help online instead. Chief executive Jim Harra said the MP’s committee’s claims on its customer service were “completely baseless”.
Ms Egbeme added that you need to complete a self assessment if your self-employment income was more than £1,000, and for things including profit made from your hobbies and side hustles, including babysitting, selling on eBay, Vinted, Gumtree or other online platforms, including Airbnb.
She said companies like Ebay, Vinted etc are now required to share sales data and personal information on sellers that sell over 30 items or made at least £1,700.
Individuals also need to do a self-assessment if you have income from abroad that you need to pay tax on, or you live abroad but have income in the UK, or if your income from renting out a room in your house is over £7,500.
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