QUESTION: What are the consequences if I am unable to file my personal tax return nor pay the owed tax amount for the year ending April 5 2024, by the January 31 2025 deadline?
ANSWER: Missing the UK tax filing deadline of January 31 can cause a few problems.
First off, there are penalties you might face for filing late.
These penalties can get bigger the longer you wait to file. If you’re up to 3 months late, there’s usually a fine of £100. But if it goes beyond that, the penalty grows.
On top of that, if you owe any tax and miss the payment deadline, HMRC will add interest to the amount you owe.
This interest keeps growing from the date the tax was due until you’ve paid it all off.
HMRC’s current interest rate it charges on unpaid income tax, national insurance and capital gains tax is 7.25%.
Furthermore, if any liability is still unpaid by February 28 2025, a 5% late surcharge will be applied on the outstanding balance.
Not getting your tax return in on time might also affect any benefits or allowances you get that depend on your tax return information.
Things like tax credits or certain reliefs might be impacted.
In serious cases where someone repeatedly doesn’t file their taxes, HMRC might take legal action. This could mean more fines or other legal trouble.
You still have a few days to meet the filing deadline but if this is not achievable, aim to complete and file your tax return as soon as you can.
Getting it sorted quickly can help reduce some of the penalties.
If there’s a really good reason why you missed the deadline—like a serious illness or other significant challenge —letting HMRC know might help reduce the penalties too.
With regards missing the payment deadline, my advice is to communicate with HMRC and look to set up a ‘time to pay’ payment plan to pay it in instalments.
Doing this before January 31 may mitigate your exposure to the 5% surcharge.
Early contact with HMRC is advisable to prevent enforcement action being taken against you.
It should be borne in mind that a time to pay arrangement will not avoid interest being charged on the outstanding taxes.
Feargal McCormack (feargal.mccormack@aabgroup.com) is managing partner at AAB Group Accountants Limited (www.aabgroup.com). The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.
