Almost 900 thousand people have been spared a £100 fine for failing to file their tax return before the end of January, but many could still be charged interest on money owed.
Adam Park, tax specialist at Zest R&D, warned people to pay their self-assessment tax bill quickly as HMRC can still charge daily interest equal to 2.6% per year.
For example, if you paid a £1,000 tax bill a year late, you would be charged £26.
HMRC can also charge a late payment penalty, starting at 5% of what is owed from March.
Adam said, “HMRC will not accept excuses such as errors, forgetfulness, or lack of funds for late payment of tax returns, so if you’ve missed the payment deadline you should aim to pay your return as quickly as possible to avoid a higher fine.”
“2.6% interest is still charged on outstanding tax from February 1, so many should consider paying an estimate ASAP even if they haven’t done their return, and fail to do it before March 3 and there’s a 5% fee on top.
Most workers have their tax paid through their employer but if you are self-employed, or have untaxed income such as investments, you need to complete a tax return each year.
HMRC has said that a record 11.7 million tax returns were received on time.
Self-assessment customers usually face a penalty of £100 if their tax return is up to three months late.
Further fines of £10 a day are applied after three months, up to a maximum of £900.
For payments late by six months, you’ll be fined 5% of the tax you owe or £300, whichever is greater.
After 12 months, another 5% or £300 charge,depending on whichever is greater.
You can calculate how much your fine will be on the Gov.uk.