UK’s HM Revenue and Customs (HMRC) has urged more than 12 million taxpayers to file for the 2023-24 tax year, with 50 days remaining until the 31 January 2025 deadline for online Self Assessment tax returns.
Taxpayers who fall into various categories, including those with rental income more than £2,500, partners with child benefit where one earns above £50,000, and self-employed individuals earning more than £1,000, must ensure they file their returns and pay any tax owed.
Those who are self-employed as sole traders, limited company directors, shareholders, or employees claiming expenses over £2,500, as well as individuals with an annual income exceeding £100,000, are also obliged to submit a Self Assessment tax return.
As of October 2024, HMRC reported that more than 3.5 million people had already filed their returns.
However, an estimated 1.1 million people failed to meet the previous year’s deadline, resulting in late payments of tax.
In response to this issue, the government announced in the Budget an increase in the late payment interest rate by 1.5% points, effective from 6 April 2025.
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By GlobalDataThis measure is projected to generate more than £50m in additional revenue for the Exchequer in the 2024-25 financial year, with a rise expected in subsequent years.
Saffery partner Zena Hanks highlighted the benefits of filing tax returns early to avoid late payment charges.
She added: “The incentives to file returns on time continue to mount up. Late payment interest rates are already enough to make people wince – given they are linked to the Bank of England base rate which remains higher than normal, plus 2.5%. The government has confirmed that it will be adding a further 1.5% interest rate rise on late payments, estimated to rake in more than £250m for the Treasury from April next year.
“The potential hit of a late payment penalty is something to be reckoned with this Self Assessment season and taxpayers should do everything in their power to ensure they file and pay on time each year, so they do not contribute to these eye-watering penalty figures.”
In addition, the HMRC has also warned taxpayers to remain vigilant against scams.
Nearly 150,000 fraudulent schemes were reported to HMRC between November 2023 and October 2024, marking an increase of 16.7% from the previous year.
Taxpayers are advised to be cautious of potential scams as fraudsters often target individuals during the Self Assessment period, the authority said.
Moreover, prosecutions for tax evasion have surged to a three-year peak, with HMRC prosecuting 300 cases by 30 September 2024, which is a 19% increase from the 252 cases in the prior year.
