There are just four weeks left until the 31 January deadline to complete the form online and thousands of taxpayers used the festive period to submit their return.
Almost 29,000 taxpayers avoided last-minute panic and filed their returns on the first day of 2025, while 38,000 used New Year’s Eve to complete the online form.
There were 310 who opted against any parties and saw 2025 in by recording their tax return in the hour leading up to midnight on 31 December.
You are required to complete a form to work out the tax you need to pay if, during the 2023/24 financial year, you were self-employed as a sole trader and earned more than £1,000.
This is worth noting if you started a side hustle like selling goods online during that period, as you will be liable to pay tax, even if it is not your main source of income.
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HMRC has launched a tool to help taxpayers in that position work out what they will need to contribute.
You are also required to complete a self-assessment tax return if you are a partner in a business partnership or you have an income of more than £150,000.
Other circumstances include if you paid capital gains tax (CGT) when you sold something that increased in value, like a property, or you had to pay the high-income Child Benefit payment.
While HMRC noted it will treat “reasonable excuses” for a late return “fairly” if you inform the Government body before 31 January, there are penalties for doing so without good reason.
The penalties for late tax returns are:
- An initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
- After three months, additional daily penalties of £10 per day, up to a maximum of £900
- After six months, a further penalty of 5% of the tax due or £300, whichever is greater
- After 12 months, another 5% or £300 charge, whichever is greater
Ahead of the deadline, Myrtle Lloyd, HMRC director general for customer services, said: “We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest.”
‘Seven million hours on hold’
As well as for peace of mind, Alastair Douglas, CEO of TotallyMoney, has warned taxpayers of the risks of leaving it late, particularly if you want to contact HMRC to ask for any information.
Douglas said: “It’s worth remembering that last year taxpayers spent around seven million hours on hold to HMRC, with an average waiting time of 27 minutes during January. And it’s likely that this would have been even longer for those phoning later in the month, as people rushed to file their tax returns ahead of the deadline.”
“So while you might just be getting over a busy Christmas and gearing up for the new year, cracking on with your tax return might not only save you time, but also money. That’s because the taxman will start dishing out £100 fines to anybody who files their return up to three months late. And after that, they’ll start getting considerably higher.
“The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to Gov.uk and search ‘Self Assessment’ to get started now.”
