The Treasury has issued a stark update to MPs on HM Revenue and Customs' (HMRC) crackdown on unpaid taxes, as the critical January 31 deadline for Self Assessment returns approaches. Officials warn that nearly 5.65 million taxpayers still need to complete their forms, with late filers facing penalties that can soar to £900 or more.
Millions Risk Penalties as Deadline Nears
According to the latest figures, while over 6.36 million people have already submitted their returns, a significant portion of the tax-paying public is yet to act. The deadline of 11:59 pm on January 31, 2026 is fast approaching. Missing this date triggers an immediate £100 fixed penalty, which applies even if no tax is owed or if the tax due is paid on time.
If the return remains outstanding after three months, daily penalties of £10 per day can be added, up to a maximum of £900. Further punitive charges of 5% of the tax owed (or a minimum of £300) can be applied after six and twelve months. Late payment also incurs separate penalties of 5% of the unpaid tax at 30 days, six months, and twelve months, plus interest.
Treasury Details HMRC's Pursuit of Unpaid Tax
The update came in response to a written question from Conservative MP for Isle of Wight East, Joe Robertson, who asked what assessment HMRC had made of those liable for tax but not being actively pursued. The response was provided by Dan Tomlinson, the Labour MP for Chipping Barnet who serves as Exchequer Secretary to the Treasury.
Tomlinson emphasised HMRC's commitment to closing the tax gap, stating its compliance work contributed to record tax revenues of £875.9 billion in 2024-25. He revealed HMRC collected and protected £48 billion that would otherwise have gone unpaid, up from £41.8 billion the previous year.
He outlined a three-stage process for pursuing debts: initial contact via phone and letter campaigns, the use of private sector debt collection agencies, and finally, enforcement powers for those who refuse to pay. These powers include taking control of goods, county court proceedings, and insolvency applications.
Government Measures to Close the Tax Gap
The Minister highlighted a package of government measures announced in recent fiscal events designed to tackle non-compliance. These include announcements at the Autumn Budget 2024 (£6.5 billion), Spring Statement 2025 (over £1 billion), and Autumn Budget 2025 (a further £2.4 billion by 2029-30).
Collectively, these policies aim to raise a total of £10 billion in additional revenue by 2029-30 by addressing tax evasion, avoidance, criminal attacks, and error.
Taxpayers are urged to file their returns and pay any tax owed immediately to avoid penalties. Those who registered for Self Assessment after October 5, 2025, should check for a letter or email from HMRC which will specify a different filing deadline, typically three months from the date of the notice, though the tax payment deadline of January 31 remains unchanged.
