The deadline for filing tax returns for the 2024-25 tax year is fast approaching. Taxpayers must not only complete their tax returns but also ensure they pay any taxes owed by January 31.
Important Tax Payment Information
According to Alice Haine, a personal finance analyst at Bestinvest, sufficient cleared funds need to be available in bank accounts before the deadline. This is crucial for those who want to avoid penalties associated with late payments or missed deadlines.
Payment Flexibility for Taxpayers
Taxpayers facing difficulties in paying their tax bill in full may apply for a “time to pay” agreement online. This option is available for individuals owing less than £30,000 who meet specific criteria.
Penalties for Late Filing
Filing tax returns after the January 31 deadline can lead to substantial penalties:
- Initial fixed penalty of £100, regardless of tax owed.
- Additional daily penalties of £10 for up to 90 days, amounting to a maximum of £900.
- After six months, a charge of 5% of the tax due, or £300, whichever is greater.
- After twelve months, another 5% or £300 charge applies, whichever is greater.
Moreover, late payments will incur further penalties of 5% of the unpaid tax at key intervals: 30 days, six months, and twelve months. Interest may also accrue on any amount that remains unpaid past the deadline.
Considerations and Precautions
The HMRC may take into account reasonable excuses for missed deadlines, which can help taxpayers avoid penalties. However, it’s essential to be vigilant about potential scams. Criminals often impersonate HMRC representatives, threatening individuals with unpaid tax bills or offering fraudulent rebates.
As the tax return deadline approaches, taxpayers are urged to prepare adequately to avoid penalties and stay safe from scams.
