Don’t miss the January 31 tax deadline!
There’s just a fortnight left to get your tax return in or risk being hit by a £100 fine.
We may earn commission from links on this page.
As of early January, more than 5.65 m people had yet to file their tax returns online for the 2024/25 tax year, according to HMRC. Those who don’t get it in by January 31 will automatically be issued with a £100 fine and, if the return still isn’t submitted after three months, there’ll be additional daily penalties of £10 per day, up to a maximum of £900. After six months, there’s another 5% of the tax due or £300 payable, whichever is higher, and after 12 months, there’s a further 5% or £300 charge.
If you’re one of the millions racing to get your return in on time, check you have access to the system first. Sarah Coles, head of personal finance at Hargreaves Lansdown said: “Make sure you have your Unique Taxpayer Reference (UTR) number and can access the Government Gateway right now. If you haven’t registered for self-assessment, do it now, because your UTR will take up to ten days to reach you by post. If you’ve not registered for the Gateway yet, it will take up to ten days for your activation code to get to you. If you’ve forgotten or lost any of these things, you can recover them.”
Remember to claim back pension tax relief
When completing your return, there’s various information you should include which may help you to reduce your potential tax bill. For example, if you’re a higher or additional rate taxpayer and pay into a pension, make sure you claim back any extra tax relief you might be entitled to.
Gary Smith, Financial Planning Senior Partner and retirement specialist at wealth management firm Evelyn Partners said: “Anyone paying into either a “relief at source” pension scheme or a personal pension like a Self-Invested Personal Pension (SIPP) will contribute sums out of net pay, after income tax has been deducted. Basic rate tax relief at 20% will be added automatically by the pension provider - but if you have paid tax on your income at the higher rate of 40% or additional rate of 45%, you will then need to proactively claim back the extra 20% or 25% in relief from HMRC.
“As a first step employees should check what sort of system their workplace scheme uses if they aren’t sure. They can specifically ask their HR people or the pension provider if all their tax relief has been added to their contributions.
“All personal pension savers meanwhile – whether it is a policy with one of the big insurers, a stakeholder pension or a SIPP - can assume they need to take action to claim back higher or additional rate tax relief.”
If you’re struggling to pay
If you’re worried you won’t be able to pay the tax you owe by the January 31 deadline, you may be able to arrange a more affordable monthly repayment plan. Known as ‘Time to Pay’’ this can be set up online at www.gov.uk, provided you don’t owe more than £30,000. If you owe more than this amount, you’ll need to contact HMRC directly to see if you can come to a repayment arrangement.
When setting up Time to Pay, you’ll need to provide your unique tax reference number, your bank account details and details of your income and spending.
Dawn Register, a tax dispute resolution partner at accountancy firm BDO said: “Many individuals and businesses can find themselves in challenging financial circumstances in January – and this can be compounded if a large tax bill falls due at the end of the month. Time to Pay arrangements can therefore be a godsend for those who may just need a little time to stagger their payments and can demonstrate genuine hardship.
“However, those taking advantage of Time to Pay arrangements should be aware that late payment interest will be charged on outstanding amounts so this should be factored into any decision. Also, HMRC are swift to take debt enforcement action on those who ignore tax bills or default on Time to Pay arrangements, so care is needed to ensure tax bills are paid in full.”