HM Revenue and Customs (HMRC) has issued an urgent warning to workers and freelancers across the UK, highlighting that individuals with four specific types of income may be unaware they need to submit a Self Assessment tax return by the fast-approaching deadline of January 31.
Who Needs to File a Self Assessment?
According to the tax authority, you are likely required to complete a return for the 2024/25 tax year if you received income from any of the following sources: being self-employed and earning more than £1,000, income from renting out property, savings, investments, or dividends above certain thresholds, or any profit from selling assets like cryptoassets (cryptocurrency) or shares.
The warning is particularly pertinent for the growing number of people with side hustles or freelance gigs alongside their main employment. HMRC has made a free online tool available to help people check their filing obligation, which does not send data to HMRC but provides immediate clarity.
The Mounting Cost of Missing the Deadline
Failing to submit your return by 11:59 pm on January 31 triggers an automatic £100 fixed penalty, even if you owe no tax or have already paid your bill. The financial penalties escalate sharply the longer the return remains outstanding.
After three months, daily penalties of £10 can be added, up to a maximum of £900. At six months, a further penalty of 5% of the tax due or £300 (whichever is greater) is applied, with another 5% charge after 12 months. Late payment also incurs separate penalties of 5% of the unpaid tax at 30 days, six months, and 12 months, plus interest on the amount owed.
Millions Yet to File as Deadline Looms
HMRC revealed that as of January 5, while over 6.36 million taxpayers had filed, approximately 5.65 million people were yet to submit their Self Assessment. The revenue service emphasised that the system allows you to start a return, save your progress, and return to it as many times as needed before final submission.
It is crucial to note that payment for any tax owed is also due by the same January 31 deadline. HMRC has stated it will treat people with a reasonable excuse for missing the deadline fairly, but you must contact them to explain before the cut-off where possible.
This month's deadline relates to the tax year from 6 April 2024 to 5 April 2025. If your income from the listed sources only began after April 2025, your filing deadline will be 31 January 2027.
