HMRC Alert: Over 1.1 Million Taxpayers Face Penalties for Late Self-Assessment

On: Thursday, April 10, 2025 6:38 AM

HMRC Alert: Over 1.1 Million Taxpayers Face Penalties for Late Self-Assessment missed the January 31, 2025 deadline for filing a self-assessment tax return. Well, worry not; you are not alone. According to HMRC – Her Majesty’s Revenue and Customs – just over 1.1 million people failed to submit a tax return this year and will now be charged a basic penalty of £100, ranting up from there. Did you fail to submit your self-assessment tax return by the January 31 deadline in the year 2025? You are not alone. Over 1.1 million taxpayers in UK are there and in addition they will receive a minimum penalty of £100, according to HMRC (Her Majesty’s Revenue and Customs), which will keep on increasing. All these penalties increase gradually. They can even include interest, as well as additional charges.

Topic	Details
Missed Deadline	Over 1.1 million taxpayers missed the 31 January 2025 deadline.
Initial Penalty	A £100 fine applies immediately upon missing the deadline.
Ongoing Penalties	Daily fines of £10 after 3 months, up to £900.
Additional Charges	Further fines at 6 and 12 months, 5% of tax due or £300.
Interest on Unpaid Tax	Interest starts at 7.25%, increasing to 8.75% in April 2025.
Appeal Options	You can appeal if you have a reasonable excuse (e.g., illness, bereavement).
Time to Pay	Installment plans available via HMRC’s “Time to Pay” scheme.
Common Mistakes	Incorrect figures, missing documents, and forgetting deductions.
Tax-saving Tips	Keep records, claim deductions, use tax-efficient investments.
Official HMRC Website	Visit HMRC for more details.

In this article: we will find:

What happens if you file your tax late?
How and how much does HMRC impose a penalty?
What are the ways to avoid the penalty?
How can you appeal?
And most importantly – what do you do if you haven’t filed your tax yet?

What are HMRC’s rules on late tax filing?

Initial penalty: £100
Such a filthy liability or loss However, this penalty will be imposed regardless of whether the taxpayer has tax dues or is just one of the leave-claims laid out in the penalties for making bail available through an ordinary course of business process for January 31, 2025.
Three-month delay: £10 per day penalty
If you are late for more than 3 months, a penalty of £10 will apply for each day, up to a maximum of £900
Six-month delay: 5% or £300
After 6 months, the penalty will be 5% of your tax liability or £300 – whichever is higher.
Twelve months delay: Again 5% or £300
Interest on unpaid tax: If you do not pay the tax until now, then you will be charged interest on it at the rate of 7.25% per annum, which will increase to 8.75% from April 2025.

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After a delay of 12 months, a penalty charge of 5% or £300 will be levied again.

Example: Suppose you owe £5,000 in tax, but have not submitted any returns for the past twelve months
Initial penalty: £100
After 3 months: £900 (£10 x 90 days)
After 6 months: £300 or 5% of tax (whichever is higher)
After 12 months: £300 or 5% again
Total: £1,600 plus penalty + interest

Why are so many people filing late?

HMRC believes that the freeze in tax thresholds and rising inflation have led to more people turning to self-assessment.
People who did not pay tax earlier are now required to file returns, such as:
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People with side income (such as rental income or investment returns)
Common mistakes that lead to late filing of tax
Laziness or procrastination: Waiting until the last minute.
Wrong figures: Misrepresenting income or deductions.
Missing important documents: Keep all bank statements and income proofs ready in advance.
Forgetting deductions: Ignoring tax reliefs.
Not registering for self-assessment: New taxpayers should register in time.

What to do now? How to avoid penalties?

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File tax as soon as possible: Go to the HMRC website and file a return through the online self-assessment portal.
Pay as much tax as you can: If you can’t pay the full amount, pay as much as you can. This will reduce the interest.
Use the “Time to Pay” scheme: If you can’t pay the full amount, get an instalment plan from HMRC:
The total liability must be less than £30,000.
out must be able to make the payments within 12 months.

Appeal if you have a valid reason

If you have a valid reason why you didn’t file your tax on time, you can appeal against the penalty. Such as:
A serious illness or hospitalisation
Death in the family
Technical glitch on the HMRC website
Financial crisis
To appeal, go to the HMRC website and apply with the required documents.
Tax saving tips
Keep a record of every expense and deduction
Invest in retirement funds or ISAs
Help an accountant or use tax software
Get into the habit of filing on time

Conclusion

Every year, millions of taxpayers fail to file their self-assessment returns on time—sometimes because of a busy schedule, or sometimes because of the complexities of the system. But the penalties and interest levied by HMRC not only add to the financial burden, but also cause mental stress. If you have missed the 31 January 2025 deadline, this is a warning bell for you. It’s time to stop being careless and act responsibly. Tax filing is not just a legal requirement, but also a sign of being a responsible citizen. HMRC’s penalty system is phased in—the more you delay, the more you lose. But the good news is that it’s not too late yet. If you file your return now, you can avoid further hefty penalties. And if you are unable to pay, schemes such as “Time to Pay” are there to help. If you have a valid reason—illness, a family emergency or technical problem—be sure to appeal. HMRC understands human circumstances, provided you explain your situation honestly. Remember filing taxes timely not only saves you from getting fined but also keeps your streak clean with the HMRC, which can help you prevent any legal hassles going ahead.