Background
A Happy New Year to all, and a reminder that the Self Assessment Tax Return deadline for the year ended 5 April 2024 is fast approaching. In fact today HM Revenue & Customs (HMRC) have issued a prompt regarding the deadline, and have estimated there are some 5.4 million taxpayers who they expect still need to complete a return.
Returns must be submitted online by midnight on 31 January 2025 to avoid penalties being charged, or if you are using an agent, by 5pm on Friday 31 January 2025.
If you have not yet provided us with your tax return information for the 2023/24 tax year then this represents your last opportunity to send your details to us to enable us to try to complete your return by the 31 January 2025 deadline.
Detail
Self Assessment Late Filing Penalties
There is an automatic £100 late filing penalty for individuals who fail to submit their tax return by 31 January. The late filing penalty will be charged if a return is filed after the deadline irrespective of whether there is a tax liability.
Additional penalties will arise if the return is submitted 3, 6 or 12 months late.
Appeals
It is possible for late filing penalties to be appealed, in very exceptional circumstances, provided a taxpayer can demonstrate a ‘reasonable excuse’ to support the late filing. However, the appeals process should not be considered a ‘safety net’ for not filing by the deadline since HMRC have a rather narrow definition of a reasonable excuse.
Appeals must be lodged within 30 days of the date HMRC issue the penalty notice.
Self-Assessment Late Payment Penalties
Any outstanding tax for the year ended 5 April 2024 also falls due for payment on 31 January 2025. If the outstanding payment is not settled by 2 March 2025, then an additional 5% surcharge will be added to a taxpayer’s liability by HMRC. There are additional surcharges on any amounts remaining unpaid after 6 months and 12 months.
Interest will also be charged from 1 February 2025 on any amounts outstanding. The interest rate charged by HMRC is currently 7.25%.
To assist taxpayers HMRC allow electronic payments, typically via internet or telephone banking, which will be processed on the same or next day.
For taxpayers who may not be able to pay their liability on time HMRC may offer additional time to pay or set up a payment plan in order to avoid the 5% late payment surcharge which ordinarily would be applied to any tax outstanding on 2 March 2025.
A payment plan can be set up online to spread the cost of a taxpayers Self-Assessment bill using HMRC’s self-serve Time to Pay facility if:
- they owe £30,000 or less;
- their tax returns are up to date;
- they do not have any other payment plans or other outstanding tax with HMRC.
Further details can also be found at https://www.gov.uk/difficulties-paying-hmrc.
If a taxpayer is not eligible for a payment plan or cannot use the online service then they can call the Self-Assessment payment helpline on 0300 200 3820.
Our advice remains the same however in that we urge taxpayers to file their tax returns as soon as possible in order to avoid any complications with their tax affairs.
If you have any questions regarding the filing of your tax return or paying your tax liability by 31st January 2025, please speak to your usual contact at the firm.
To see our other news items please visit our Muras Baker Jones – Blog.