“Act Now” says HMRC with nearly 4 Million People Yet to File UK Tax Returns
As the 31st January deadline looms, almost 4 million individuals are yet to file their self-assessment tax returns, sparking a plea from HM Revenue and Customs to take immediate action.
Late Filers Face Immediate Penalties
Failing to meet the deadline comes with consequences. An immediate £100 fixed penalty awaits, even if there’s no tax liability. This penalty is incurred regardless of whether the tax bill is paid on time.
Penalties Accumulate Rapidly
After three months, additional penalties of £10 per day kick in, reaching a maximum of £900. Beyond that, further penalties apply. Delays in tax payment also incur interest charges.
High Interest Rates Add to the Sting
Late payment interest is set at 7.75%, the highest in 16 years. Missing the deadline this year could potentially result in a financial windfall for HMRC, warn accountants.
The Urgent Call to Action
HMRC’s recent release emphasizes the urgency with the headline “Less Distraction, More Action!” Those yet to complete their forms are urged to act promptly or risk facing the initial £100 penalty.
Numbers and Growth
Over 12.1 million people are expected to file returns for the 2022-23 tax year. On 9 January, 5.1 million taxpayers still hadn’t filed. As of 23 January, the number reduced to 3.8 million.
Dire Consequences for Delay
Myrtle Lloyd, HMRC’s director general for customer services, stresses, “If you are a self-assessment taxpayer, now is the time to take action and get your return done.”
Growing Complexity for New Filers
The self-assessment net has widened over the years. Accountancy firm BDO warns that thousands, including those claiming child benefits or experiencing income spikes, might be unaware of their filing obligations, putting them at risk of penalties.
Risk of a Windfall for HMRC
BDO suggests HMRC might enjoy a windfall in 2024 if tax returns aren’t filed on time. With more people crossing thresholds requiring filing, there’s a significant risk of an increase in those missing the 31 January deadline.
As the deadline fast approaches, it’s crucial for the nearly 4 million individuals yet to file their tax returns to heed HMRC’s call. Avoiding penalties and interest charges should be motivation enough to act now and ensure compliance with self-assessment obligations.
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