As the January 31 deadline for filing self-assessment tax returns approaches, HMRC has issued an urgent reminder to millions of taxpayers. According to recent data, nearly 5.5 million individuals are yet to file their returns for the 2023-24 tax year. With frozen tax thresholds in place, more people may find themselves unexpectedly required to file.
Who Needs to File a Tax Return?
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HMRC has issued an urgent reminder to millions of taxpayers earning £1,700 or more as a “significant” deadline is just weeks away. Alice Haine, a personal finance analyst at Bestinvest, explains that tax filing is mandatory for anyone with untaxed income. She warns taxpayers not to assume the rules don’t apply to them. “With most personal tax thresholds frozen until 2028, individuals earning through PAYE might now cross the £150,000 salary threshold, requiring them to submit a tax return,” Haine says.
Other reasons to file include earning more than £1,000 through self-employment or having untaxed income from sources such as tips, commissions, savings, investments, dividends, or rental properties. Even foreign income must be declared, adding to the complexity for many taxpayers.
Start Early to Avoid Last-Minute Pressure
Jashoda Pindoria, head of self-assessment operations at HMRC, advises taxpayers to begin the process now. “Starting early helps ease the pressure, allowing you to gather information and seek assistance if needed on Gov.uk to ensure accurate and timely submission,” she notes.
Once the return is filed, taxpayers receive a summary of what they owe, helping them budget and make payments before the deadline.
Utilizing Technology for Easier Filing
Caroline Miskin from the Institute of Chartered Accountants in England and Wales highlights the benefits of using HMRC’s app. “The app provides quick access to vital details such as your self-assessment tax reference number and employment income, saving time and effort,” she explains. It also includes helpful guidance on deadlines and filing procedures.
Penalties for Missing the Deadline
Charlene Young, a pensions and savings expert at AJ Bell, emphasizes the importance of meeting the January 31 deadline to avoid penalties. “Missing the deadline means accruing daily interest from February 1, with HMRC’s annual interest rate at 7.25%,” she warns.
Young also advises those struggling to pay to explore options such as HMRC’s payment plans. Taxpayers who owe £30,000 or less may be eligible for installment agreements. Additionally, if future earnings are expected to decline, they can apply to reduce their payments on account for the next year.
Act Now to Avoid Stress
With just weeks to go until the deadline, HMRC and financial experts urge taxpayers to act promptly. Whether you’re self-employed, earning untaxed income, or navigating frozen thresholds, staying proactive is key to avoiding penalties and ensuring compliance.
By following these expert tips and leveraging available tools, taxpayers can meet the deadline with confidence and ease.
