Pictured: Matthew Rutter BSc(Hons) FCA CTA
According to HM Revenue & Customs (HMRC), an estimated one million taxpayers missed the 31 January deadline for filing their 2024/25 Tax Returns. If you are one of them then the key message is to act as quickly as you can and submit your Tax Return without any further delay.
Will I be automatically fined for not submitting my Return by 31 January?
The answer to this is generally yes since if HMRC sent you a notice to complete a Tax Return shortly after 5 April 2025, but you have not yet filed this, then there will be an automatic £100 penalty, even if there is no tax payable or if you have already paid all of the tax that you think you might owe.
In some circumstances you may have slightly longer to file your Tax Return. This may apply, for example, if HMRC have only recently issued you with a notice to complete a 2024/25 Tax Return.
If that is the case then you usually have three months after the date of such notice to file your Return.
What about additional penalties and interest?
In addition to the flat rate penalty of £100, there will be interest charged (at a current rate of 7.75% per annum) on any tax which has not been paid by 31 January 2026. Furthermore, any tax which remains unpaid at 2 March 2026 will incur a further 5% surcharge.
The penalties get much worse if the delay continues. If your Tax Return was due to be submitted by 31 January 2026 and is still not submitted by 30 April 2026 then daily penalties are levied at the rate of £10 per day (up to a maximum of £900).
There are even more penalties levied if the Return is more than 6 months late or more than 12 months late.
Similar additional surcharges of 5% are also applied to late payment of tax if the tax remains unpaid after 6 months and 12 months.
Do HMRC have any flexibility with reducing or cancelling penalties if I am still struggling to file my Return?
Because of the potentially significant penalties referred to above, it is much better to try to bring matters up to date as soon as possible, even if you have missed the 31 January 2026 filing deadline.
HMRC do have the ability to cancel late-filing penalties if you can demonstrate that you had a ‘reasonable excuse’ for not filing your Tax Return on time. There is no definition of ‘reasonable excuse’ for these purposes but if you feel you have genuine grounds for failing to meet the deadline, it may be worth writing to HMRC and attempting to appeal against the fine.
However, you should be aware that generally HMRC will require your Tax Return to be submitted before they will consider any appeal against late filing penalties.
Please contact us if you would like any assistance with bringing your tax affairs up to date or if there is anything else you would like to discuss.
The above is for general guidance only and no action should be taken without obtaining specific advice.
Tax giving you a headache? It pays to get professional advice.
At Pearson May we specialise in a full range of accountancy services to help you maximise your profits and minimise the tax you have to pay.
Call Bath 01225 460491 or visit pearsonmay.co.uk
