Brits are being urged to check if they owe the taxman, as missing the January 31 tax return deadline could result in a £100 fine, with more than 5.4 million people dragging their heels according to HMRC stats. Alastair Douglas, CEO of TotallyMoney, issued a stern warning especially to folks turning hobbies into hustle by selling online.
The expert warned: “If you’re unsure if you need to file a tax return, it’s worth double checking, especially if you’ve been selling items on apps like Etsy, Ebay or Vinted, or if you’ve made money from investments, including rental properties, crypto and even tips or commission.”
This deadline generally applies to anyone who has earned an income above £1,000 that was not taxed or came from outside of their usual taxed income. However, according to MSE, there are some exceptions.
The main groups that need to file their tax return before the deadline include self-employed workers, those earning more than £150,000, and those claiming Child Benefit and earning more than £50,000 a year for high income Child Benefit charge.
It’s worth noting that although the high income Child Benefit charge has been raised to £60,000, the £50,000 limit still applies to the 2023/2024 tax year.
Other groups include those earning money from renting out property, tips, commission and other untaxed income including selling goods or services online, people earning £10,000 or more before tax on savings, investments, shares or dividends, those earning income abroad.
People who need to pay Capital Gains Tax, are receiving income from a trust, or filed a self-assessment tax return in 2022/2023 will also likely need to submit a return this year.
If in doubt, you can always use the government’s free tool to check if you’re liable to file a tax return. People have until 11:59pm on January 31, 2025 to submit their return and make payments towards their tax bills for the 2023/2024 tax year. After this they could face a fine of £100 which also has interest charges of 7.25%, after three months this increases with a daily additional penalty of £10 up to a £900 maximum.
If you neglect the issue for six months, you’ll face an additional penalty of 5% of the tax due or £300, whichever is greater. This penalty repeats at the 12-month mark.
In total, ignoring a mere £100 tax bill until next January could cost you £1,700, excluding any interest charged on late payments.
Money.co.uk experts explained that to initiate a self-assessment tax return, you need to register with HMRC if you haven’t already, which can take up to 10 working days to complete.
You’ll then need to collect documents relevant to why you need to submit a self-assessment return such as your P60 or P45, bank statements, rental income records and information on your dividends or capital, then simply follow the instructions outlined on the HMRC website.
The experts added: “The system will guide you through various sections that apply to your situation. Be accurate and honest with the information you provide. The online system will calculate the tax you owe based on your provided information.”
Once your return is submitted, you also have to make payments on your tax bill before January 31. This can be done via online or telephone banking, at your bank or building society but you’ll need to bring your paying-in slip from HMRC or through the post with a cheque.
The experts advised: “After you’ve paid, keep a record of the payment. HMRC may need proof of payment in case of any discrepancies.”
