HMRC issue warning to over three million people over outstanding tax

Here is what you risk if you haven't filed yet

HM Revenue and Customs said that some 8.6 million people have already filed their return for the 2024-25 year.

Now, taxpayers are being urged to act now if they are yet to file, or else they risk missing the deadline.

If you haven’t filed yet, you also risk facing a £100 penalty.

The penalties for late tax returns are:

An initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time;
After three months, additional daily penalties of £10 a day, up to a maximum of £900;
After six months, a further penalty of 5% of the tax due or £300, whichever is greater;
After 12 months, another 5% or £300 charge, whichever is greater.

HMRC issued £325m in fines and interest charges last year, to taxpayers who paid their self-assessment bills late, according to the national accounting firm UHY Hacker Young.

The firm said that at least 600,000 taxpayers failed to pay their self-assessment tax by the deadline last year.

According to estimates by HM Revenue and Customs, £8.7bn of self-assessment tax went unpaid last year, 12.5% of the £69.6bn it expected to collect.

In business and personal taxes £44bn are overdue in total, of which 86% or £37.8bn is now ready for debt collection processes.

There are 10 last-minute checks to do to make sure you've dodged the key tax return traps, according to Sarah Coles, head of personal finance at Hargreaves Lansdown.

Here is the 10-step checklist if you are one of the people who still hasn't filed their return:

- Make sure you have your Unique Taxpayer Reference number and can access the Government Gateway. If you haven't registered for these before, the information you need can take up to 10 days to reach you.

- Beware of capital gains tax mistakes. If you sold assets like shares after 30 October 2024, the system won't automatically calculate the correct amount of capital gains tax you have to pay. You need to use the adjustment calculator on the government website to make changes to the calculation.

- Consider the impact of frozen tax thresholds. If a pay rise pushed you over the income tax threshold into paying higher or additional rate tax, the extra tax on your income may have been taken through the PAYE system, but it may also mean you have to complete a tax return. You may need to reclaim tax on pension contributions or charitable donations, or you may need to pay tax on your savings now your personal savings allowance has dropped.

- Consider child benefit. If your income (or your partner's) has pushed over the £60,000 threshold, and you receive child benefit, you will need to repay at least some of it through self-assessment.

- Don't forget crypto. HMRC has been reminding people that gains from crypto need to be declared for capital gains tax purposes.

- Remember gains from trading on sites like eBay and Vinted. You have an allowance of £1,000 if you're selling for profit, but after that, you need to declare this by completing a tax return.

- Don't rush the pensions bit. This is a common area for mistakes to happen. Higher rate taxpayers need to make sure they claim higher rate tax relief if it isn't done automatically.

- Check you have actually paid. You'd be surprised how many people are so focused on the admin that they forget this bit.

- If you can't afford your bill, see if you can use a time-to-pay arrangement. You should be able to do this online if you owe £30,000 or less, you're within 60 days of the payment deadline, and you don't already have a payment plan with HMRC.

- Check whether you have to use Making Tax Digital for income tax. Sole traders and landlords with a turnover of more than £50,000 will need to use it from 6 April, so you'll need to sign up as soon as possible.