Record Numbers File Self-assessment Tax Returns, But 1.1 Million Miss Deadline

While a record-breaking 11.5 million taxpayers submitted their self-assessment tax returns by the January 31st deadline, an estimated 1.1 million individuals missed the mark, potentially facing penalties. This highlights the ongoing complexities of tax filing for self-employed individuals and those with complex financial situations.

Record High, Yet Room for Improvement:

This year's 11.5 million filings represent a significant increase compared to previous years, reflecting growing numbers of self-employed individuals and individuals with taxable income outside of traditional employment. HMRC estimates that over 500,000 people entered the self-assessment system for the first time.

However, the 1.1 million who missed the deadline indicate that challenges persist. Procrastination, lack of awareness, and the complexity of the system itself are often cited as contributing factors.

Consequences of Missing the Deadline:

Missing the self-assessment deadline can lead to a series of financial penalties. An initial £100 penalty is automatically applied, followed by daily fines of £10 for up to 90 days. Up to six months penalties can increase to 5% of the outstanding tax owed, with a maximum of £300. Beyond 6 months it is 5% of all tax outstanding at that date.

HMRC encourages those who missed the deadline to file their returns as soon as possible to minimise penalties. They offer various support options, including online guidance, and webinars. Although the traditional phone helpline is no longer available.

Looking Ahead:

The increasing number of self-assessment taxpayers highlights the need for ongoing efforts to simplify the system and provide clearer guidance. HMRC has introducing digital tools and simplifying processes, but further improvements are likely necessary to reduce the number of missed deadlines and ensure everyone can meet their tax obligations.

What HMRC can certainly do to assist taxpayers, (especially those brought into system for the first time, partly by the freezing and reductions of tax brackets) is bring back it’s helplines for those who are new to the system. The decline of HMRC services for taxpayers are certainly a contributory factor.