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(qlmbusinessnews.com Wed, 24th Jan, 2024) London, UK —
“Deadline Dilemma: 4 Million Britons in Race Against Time to File Tax Returns”
With just eight days left until the 31st January deadline, almost 4 million individuals are yet to complete their self-assessment tax returns, prompting HM Revenue and Customs (HMRC) to issue a pressing “act now” plea. Failure to meet the deadline may result in severe penalties, including late payment interest at a historic rate of 7.75%, the highest in 16 years, potentially leading to a substantial windfall for HMRC.
This tax season, a staggering 12.1 million people are expected to file their returns for the 2022-23 tax year. On 9th January, HMRC reported that 5.1 million taxpayers had yet to submit their returns, and as of 23rd January, the figure stands at 3.8 million.
In a release titled “Less Distraction, More Action!” HMRC emphasized the urgency, urging those who have not yet tackled their forms to “act now or risk facing a £100 penalty.” The consequences for a late tax return are immediate, with a fixed penalty of £100, applicable even if no tax is due or if the tax bill is paid on time. After three months, additional penalties of £10 per day, up to a maximum of £900, may apply, with further penalties beyond that point.
Late payment of tax incurs additional penalties and interest. The current late payment interest rate, raised last year to 7.75%, is the highest since early 2008.
Myrtle Lloyd, HMRC's Director General for Customer Services, stressed, “If you are a self-assessment taxpayer, now is the time to take action and get your return done.”
Notably, approximately 600,000 customers missed the 31st January deadline last year. Over the years, the number of individuals subject to self-assessment has steadily increased, reaching 11.4 million in 2018, up from just over 10 million a decade ago.
Accountancy firm BDO highlights the potential inclusion of thousands of new filers for the 2022-23 tax year, including parents affected by the “high income child benefit charge” and higher earners surpassing the £100,000 threshold. There is a significant risk of penalties for individuals unaware of their obligations or those engaged in side hustles.
BDO warns that HMRC could reap a windfall in 2024 if tax returns are not submitted on time, especially with more individuals likely to fall under the filing threshold.
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