Consumer champion Martin Lewis has issued an urgent warning to millions of taxpayers across the UK, highlighting a fast-approaching deadline that could land them with an immediate £100 penalty.
The looming self-assessment deadline
The critical cut-off for submitting your online self-assessment tax return for the 2024/2025 tax year is Saturday, 31 January 2026. This deadline applies to anyone required to file a return, including the self-employed, business partners, and those with other taxable income.
During a recent episode of his BBC podcast, Lewis stressed the severe consequences of missing the date. "If you miss it, you risk an £100 fine and crucially, 7.45% interest, a heavy rate of interest," he cautioned. He clarified that this annual interest rate applies daily on any unpaid tax from the deadline.
Who needs to file a tax return?
According to official HMRC guidance, you likely need to complete a return for the last tax year if any of the following apply:
- You were self-employed as a sole trader with profits over £1,000.
- You were a partner in a business partnership.
- You needed to pay Capital Gains Tax after selling an asset that increased in value.
- Your income was over £50,000 and you or your partner received Child Benefit, triggering the High Income Child Benefit Charge, and you do not pay it through your PAYE tax code.
Penalties for late filing and payment
The initial penalty for missing the 31 January deadline is a fixed £100 fine. However, the charges escalate sharply if the return remains outstanding.
After three months, HMRC adds a daily penalty of £10, 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. After 12 months, another 5% or £300 charge is added. The 7.45% interest rate applies to both the unpaid tax and any accrued penalties.
What counts as a 'reasonable excuse'?
HMRC may waive the £100 penalty if you have a 'reasonable excuse' for filing late. Government guidance lists examples, including:
- The death of a partner or close relative near the deadline.
- An unexpected hospital stay.
- A serious, life-threatening illness.
- Critical technical failures with HMRC's online services or your computer.
- Unforeseen events like fire, flood, or theft.
This issue was addressed directly on Lewis's podcast, where a listener asked about her obligation following the recent death of her husband. Tax specialist Rebecca Benneyworth, a chartered accountant, advised that while the deadline still stands, the bereavement would constitute a reasonable excuse.
"Use the words 'reasonable excuse', explain that your husband died and you've been dealing with that, and I think that will get that penalty cancelled," Ms Benneyworth said. She emphasised that taxpayers should appeal any penalty notice within 30 days.
However, she issued a crucial warning: the excuse is not indefinite. "You've got a reasonable excuse now, but if you then don't file it until say, September, I think HMRC's view would be that reasonable excuse had come to an end at some point," she explained. The advice is to file as soon as you are able, even if seeking help, to minimise further penalties and interest.
Taxpayers must file their return and pay any tax owed via the official Government website. Those who receive a penalty notice typically have 30 days from its issue date to appeal to HMRC.
