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With the UK's Self Assessment tax return deadline closing on 31 January, HM Revenue and Customs (HMRC) has confirmed that over one million UK residents now face a minimum £100 penalty for missing the filing deadline. This comes after reports that several taxpayers were unable to complete their payments due to a major Barclays IT outage, which disrupted services overnight on 1 February.

What Are the Penalties for Late Tax Returns?

According to an HMRC press release, a late tax return incurs an initial fixed penalty of £100, regardless of whether any tax is owed or if the due tax has been paid on time. Additional penalties apply the longer the delay:

  • Three months late – £10 per day, up to a maximum of £900.
  • Six months late – An extra penalty of either 5% of the tax due or £300, whichever is greater.
  • Twelve months late – A further penalty of 5% of the tax due or £300, whichever is greater.

HMRC has also warned that additional penalties apply for late payments, with 5% of the unpaid tax charged at 30 days, six months, and 12 months. Interest is also applied to any outstanding balance.

Myrtle Lloyd, HMRC's Director General for Customer Services, stated:

'Thank you to the millions of people and agents who filed their Self Assessment tax return and paid any tax owed by 31 January. I urge anyone who missed the deadline to submit their return as soon as possible to avoid further penalties.'

Self Assessment 2025: Key Figures

A total of 12,026,540 Self Assessment tax returns were expected this year, with 11,509,810 successfully submitted by the 31 January deadline. This includes expected returns, voluntary submissions, and late registrations. Of the expected returns, 10,887,810 were filed on time, leaving an estimated 1.1 million customers who missed the deadline.

  • 97.36% of returns (11,205,810) were filed online, while 2.64% (304,000) were submitted via paper forms.
  • On deadline day, 732,498 people submitted their tax returns, with the busiest period occurring between 16:00 and 16:59, when 58,517 returns were filed.
  • A significant number left it to the last minute, with 31,442 returns submitted between 23:00 and 23:59.

HMRC Under Fire: From Poor Phone Services to Aggressive Tax Demands

HMRC has faced heavy criticism this year, particularly over its customer service. In January, a parliamentary report accused the tax authority of running a 'deliberately poor' phone service to push taxpayers towards online help.

The Public Accounts Committee (PAC) revealed that 43,690 callers were disconnected after waiting on hold for over 70 minutes in the first 11 months of the 2023-24 financial year. This was more than six times higher than the 6,875 disconnections recorded in 2022-23, further eroding public trust in the tax system.

In February 2024, HMRC sparked further outrage after being accused of using 'dangerous and sinister' tactics in a tax crackdown linked to at least 10 suicides. Critics claim that rather than targeting firms that promoted tax-avoidance schemes as compliant, HMRC aggressively pursued individuals—including teachers, nurses, and cleaners—causing severe financial distress.

The enforcement of the Loan Charge has led to widespread hardship, with MPs and the Loan Charge Action Group (LCAG) demanding an independent inquiry into HMRC's actions.

As the tax authority faces mounting criticism, many are calling for urgent reforms to restore public confidence in the UK's tax system.

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