New figures released by HMRC have revealed that 1.1 million people missed the 31st January deadline to submit their tax returns and could be on the hook for late filing penalties.
Despite its estimate of late filers, HMRC has reported that it received over 500,000 more returns than it expected prior to the deadline, suggesting that hundreds of thousands of people have been dragged into the Self Assessment net for the first time.
This might reflect the impact of fiscal drag pulling more people past the £50,000 threshold for having to pay back the High Income Child Benefit Charge, or past the £100,000 income limit requiring them to file a return.
The 1.1 million people who HMRC estimates missed the deadline is a 10% rise on the estimated 1 million people who missed it last year.
There is an automatic fixed late filing penalty of £100 which applies even if no tax is due or if the tax has been paid on time. After three months, this rises to £10 per day up to a maximum of £900 for 90 days. If you file after six months, there is a £300 penalty, or 5% of the tax due, whichever is the higher.
Dawn Register, Head of Tax Dispute Resolution at BDO said “The higher number of people being required to file a tax return for the 22-23 tax year is likely to have led to a rise in the numbers of people filing late. We would encourage HMRC to do more to support people to be compliant and get their tax right first time.
“If you haven’t filed your tax return on time, it’s worth remembering that you can still pay an estimate of the tax owed in order to prevent late payment interest being applied which is currently at 7.75%, the highest rate for 16 years.”