Online self-assessment tax returns due by midnight

The UK's HM Revenue and Customs (HMRC) has warned that millions of people have yet to submit their online self-assessment tax returns, with the deadline at midnight, meaning they could face a £100 fine. Over three million people are at risk of a penalty, and the tax authority is advising them to seek help and advice online, and to use the app to pay any tax owed after submitting their return.

New rules stipulate that sellers on online platforms like eBay and Vinted who sell around 30 items will have their sales information shared with HMRC to be checked against their tax returns. Those who miss the deadline without a reasonable excuse will be penalized, with the fines increasing the longer they are overdue. Missing the midnight deadline will result in an initial fixed penalty of £100, even if no tax is owed.

Myrtle Lloyd, HMRC’s Director General for Customer Services, stated, “We will consider the reasons on a case-by-case basis for customers who have not paid their tax or arranged a payment plan by the deadline.” If tax is owed for more than three months, a daily penalty of £10 will be added, up to a maximum of £900, with additional penalties after six months and a year, including interest. Approximately 8.6 million people have already filed their taxes for the 2023-2024 tax year, including small businesses and those with additional income.

Benedicta Egbeme, founder of accounting firm BeniRatio Finances, told the BBC that "tax is often a daunting topic." She added that while the UK's tax system is "complex and intimidating," people should not "bury their heads in the sand" out of fear of dealing with it. She advised that if you know you have an obligation to complete a tax return, and do not have a "reasonable excuse," and have a rough idea of how much tax you might owe (which may be based on previous years’ filings), you could opt to pay the tax first without filing a return to avoid interest charges.

Ms. Egbeme said reasonable excuses for late filing include: bereavement, illness/physical ailments to the point of hospitalization, or dealing with a life-threatening condition. Other reasons that will be considered include software glitches, personal computer problems, issues with HMRC's online services, and "damage to property, files, paperwork due to fire, flood or theft." She stated that appeals against penalties can be made via an appeals form or by writing to HMRC, which may help get the penalty waived, but this still means you must submit the return. "The fact is, HMRC will only consider an appeal once you have submitted your tax return and paid," she said.

Ms. Lloyd added that people should always include their bank details on their tax return to ensure that any refunds due are paid promptly. HMRC also warned that customers need to be vigilant about the increased risk of scams around the tax deadline and should never share their HMRC login details with anyone. HMRC recently denied that it deliberately provides a “poor” phone service to try and force taxpayers to seek help online instead. Chief Executive Jim Harra said a committee of MPs’ allegations about its customer service were “completely unfounded.”

Ms. Egbeme added that if your self-employment income is over £1,000, or includes profits from hobbies and side hustles, including babysitting, selling items on eBay, Vinted, Gumtree, or other online platforms (including Airbnb), you need to complete a self-assessment. She said companies like eBay and Vinted are now required to share sales data and personal information of sellers who have sold over 30 items or earned at least £1,700. You also need to self-assess if your income is from abroad and taxable, or if you live abroad but have income in the UK, or if you have income from renting out a property over £7,500.