HMRC Responds as Data Reveals Disparity in Late Tax Filing
New research published on Tuesday has raised concerns about a potential knowledge gap among lower-income self-employed workers, who are significantly more likely to miss the self-assessment deadline than their higher-earning counterparts. Data from HM Revenue and Customs (HMRC), obtained by retirement savings provider PensionBee through a freedom of information request, reveals that in the 2023-24 tax year, approximately 5.9% of self-employed filers earning below the basic rate tax threshold submitted their returns after the 31 January deadline. In comparison, only 3.1% of basic rate taxpayers, 2.7% of higher rate taxpayers, and 2.6% of additional rate taxpayers filed late.
Penalty Risks and Structural Challenges
Those who miss the self-assessment deadline typically face an initial £100 penalty, along with further potential charges. HMRC may waive these penalties if late filers can demonstrate a reasonable excuse. However, PensionBee's analysis suggests that lower earners may be disproportionately affected due to limited access to accountants or financial advisers and greater vulnerability to income instability, which makes fixed financial deadlines harder to meet. The provider also noted that its previous research indicates a lack of awareness that self-employed pension contributions are eligible for tax relief.
In total, around 180,000 self-employed filers were late in 2023-24, of whom approximately 94% were below basic or basic rate taxpayers. Lisa Picardo, chief business officer UK at PensionBee, commented: “Late filing of self-assessment tax returns is not evenly spread across the self-employed population. It’s heavily concentrated among those on lower incomes, many of whom sit within what we describe as the ‘invisible workforce’. For many of these workers, unpredictable income and limited support make it genuinely harder to stay on top of financial administration and obligations, whether that is filing a tax return or saving into a personal pension. Missing the deadline is often a symptom of a wider pressure that the system does not adequately account for.”
HMRC Response and Support Measures
An HMRC spokesperson responded to the findings, stating: “We’re focused on helping customers understand what they need to do and where to get support. Every year we run a national campaign to support self-assessment customers to file on time, while providing clear guidance on gov.uk and extra help from our expert advisers for those who need it. As a result, 11.5 million customers filed their 2024-25 tax return on time.”
