Tax return deadline fast approaching

Recent data from HM Revenue & Customs (HMRC) revealed 5.4 million taxpayers are still racing against the clock to file their tax returns as the 31 January deadline looms. Missing the deadline could result in fines, beginning at £100 and escalating into legal proceedings. This is in addition to the eye-watering 7.25% interest charge on any late tax payments.

HMRC’s figures also revealed nearly 25,000 people began the new year by filing their tax returns on 1 January, while 38,260 taxpayers submitted their self-assessment submissions on New Year's Eve. 

Myrtle Lloyd, HMRC's director general for customer services, urged prompt action: "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.

"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."

What is Self-Assessment?

Self-Assessment is the process you go through each year where you complete a tax return and declare your income, capital gains and any other income during that tax year to HMRC, outside of income tax that is normally deducted from your wage or pension. 
Although most commonly done by those who are self-employed, anyone who has other income outside what is normally deducted from your wages and pension, need to complete a self-assessment form – which can be paper based or digital. 
Irrespective of employment status, if you have received any untaxed income before the deadline of that tax year, you may need to complete a tax return. Even if that income comes from Ebay, Etsy or similar enterprises.

Who needs to submit a tax return? 

You may need to submit a tax return if ANY of the following applied to you in the 2023/2024 tax year (6 April 2023 to 5 April 2024): 

• You were self-employed and your income was more than £1,000
  If you earned £1,000 or less, you may still need to do a self-assessment if you want to pay 'class 2' National Insurance contributions voluntarily to protect your entitlement to the state pension and certain benefits.
• You earned more than £150,000 in taxable income. This threshold was £100,000 for the 2022/23 tax year but it's been increased. If your income is between £100,000 and £150,000 and that was the only reason you had to complete a tax return for 2022/23, you should have got a letter from HRMC telling you that you don't need to do one for 2023/24. If in doubt, contact HMRC directly to check.
• You claimed Child Benefit when you or your partner earned more than £50,000 a year
  This is known as the high income Child Benefit charge. The income threshold has now been raised to £60,000 – but the older threshold still applies for the 2023/24 tax year.
• You earned £10,000 or more before tax from savings interest, investments, shares or dividends
  Between April 2022 and April 2024, the Bank of England base rate rose from 0.75% to 5.25%. As a result, savings rates (and therefore interest payments) went up across the board – so, even if you had the same amount saved, you're more likely to have hit the threshold in 2023/24 compared to the year before.

It should be noted that if you earn more than £1,000 but less than £10,000 on savings, then HMRC will automatically amend your tax code so you don’t need to fill in a form.

Other scenarios to consider

• You earned money from renting out property such as a buy-to-let property or portfolio (or from other untaxed income, such as tips or commission).
• You earned income from abroad.
• You need to pay Capital Gains Tax.
• You received income from a trust.
• You filed a self-assessment tax return for the 2022/23 tax year (unless you've already told HMRC you no longer need to or HMRC has told you not to).

When you need to submit a tax return

This tax year ends on 5 April 2025 and all tax returns for this year will need to be completed by 31st January 2026.

Most importantly, you must tell HMRC by 5 October if you need to complete a tax return and have not sent one before. Then there are different deadlines for different types of tax returns.

If you’re doing a paper tax return, you must submit it by midnight 31 October 2025. HMRC must receive a paper tax return by 31 January if you’re a trustee of a registered pension scheme or a non-resident company. You cannot send a return online.

If you’re doing an online tax return, you must submit it by midnight 31 January 2026, and if you want HMRC to automatically collect the tax you owe from your wages and pension, then you need to submit your online tax return by 30 December.

In all cases you need to pay the tax you owe by midnight 31 January 2026. 

If you’re interested in finding out more about how we can help you build a tax efficient portfolio, making best use of allowances available to you whilst ensuring your money is working hard, Why not give us a call on 0333 323 9065 or book a free non-committal initial consultation with a member of our team.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

The Financial Conduct Authority (FCA) does not regulate tax or trust advice.