Missing the 31 January deadline can be stressful, especially for freelancers, landlords, personal trainers, or construction workers. The good news is that you are not alone facing this scenario, and the situation can be resolved. Thousands of self-employed individuals across the United Kingdom miss the deadline every year, and there are proper steps you can take to reduce the loss and get back on track.
Ignoring the missed deadline is the worst thing you can do. Instead, it’s best to take action right away. HMRC, the UK tax authority, automatically applies penalties for missed deadlines, but if you act quickly, there are ways to sort things out and possibly reduce the penalties
Here’s what you should do if you miss the self-assessment deadline:
- File your return as soon as possible.
- Pay any owed tax immediately.
- Contact HMRC to discuss your options and explain any reasonable causes for the delay.
This guide will explain how the self-assessment penalties work, what to do immediately if you miss the deadline, and how to handle the situation responsibly to get back on track with HMRC.
Next Steps If You Miss the Self-Assessment Deadline
If you’ve missed the self-assessment deadline, don’t panic! Follow these steps to minimize the impact and get back on track:
File Your Tax Return Immediately
Even if you’re facing some challenges, filing your tax return immediately is the most important first step. Here are some reasons you might hesitate, but you should still submit your return:
- You’re missing some documents.
- You’re unsure about certain sections of the form.
- You’re worried about making mistakes.
Despite these concerns, submitting your return quickly is crucial. The reason is simple: penalties increase over time, and by submitting on time (or as soon as possible), you can limit the additional charges, even if you need more time to pay.
Check Your Penalties
After submitting your return, make sure to check any penalties applied. This will help you understand the charges incurred and the timeline for payment.
Set Up a Payment Plan
If you can’t pay the full amount of your tax bill right away, consider setting up a payment plan with HMRC. This will allow you to pay in monthly installments, easing the financial burden and avoiding further penalties.
Appeal If You Have a Valid Reason
If you have a reasonable excuse for missing the deadline, such as illness or other serious personal issues, you can appeal your penalties. Make sure to provide any supporting evidence to help your case.
Save All Confirmation Emails and Records
Keep a record of your tax return submission and any confirmation emails from HMRC. This will be useful for your own reference and in case any issues arise in the future.
Set Reminders for Next Year
Finally, set a reminder for next year to avoid missing the deadline again. Filing early can help you stay organized and reduce stress next time.
What If You Can’t Afford to Pay After Missing the Deadline
If you’re unable to pay your tax bill in full, there are options available to help you manage the payment. You can apply for a payment arrangement with HMRC, allowing you to:
- Pay in monthly installments.
- Spread the cost over time.
- Avoid serious enforcement actions, such as legal measures or additional penalties.
Although interest may still apply to the outstanding balance, setting up a payment plan is far better than facing multiple fines and accumulating penalties.
How Self-Assessment Penalties Work
If you miss the deadline f or submitting your self-assessment tax return, penalties are automatically applied and increase the longer you delay. Here’s a breakdown of how the penalties work, based on HMRC guidelines:
Immediate Penalty
- A £100 fine is applied as soon as the deadline is missed, even if:
- You owe no tax.
- You’ve already paid your tax.
- The delay is only one day.
After 3 Months
- If the tax return remains unpaid for 3 months, you will incur a daily penalty of £10 per day, up to a maximum of £900. This applies whether or not you owe tax at the time.
After 6 Months
- An additional £300 or 5% of the tax owed (whichever is higher) will be added. If the tax due is below £300, the 5% charge applies instead
After 12 Months
- At the 12-month mark, a further £300 or 5% of the tax owed (whichever is greater) will be added to your penalties.
Can Penalties Be Cancelled?
In certain situations, penalties for missing the self-assessment deadline can be reduced or even cancelled if you have a reasonable excuse. Some examples include:
- Serious illness or being hospitalised.
- Bereavement or the death of a close relative.
- System failures (e.g., HMRC’s online services being unavailable).
- Fire, flood, or theft that affects your ability to file on time.
- Genuine emergencies that were beyond your control.
To cancel or reduce your penalties, you will need to provide supporting evidence for your situation. HMRC will review the evidence and decide whether to accept your appeal and adjust the penalties.
Our Tips to Stay on Top of Your Self-Assessment Deadline
- Set up calendar reminders for key dates, such as December, early January, and mid-January. This way, you’ll always be aware of the upcoming deadline well in advance.
- Track your income, expenses, invoices, and receipts regularly instead of waiting until January. Keeping monthly records will make filing much easier and less stressful.
- Using a separate business bank account helps keep your business and personal finances organized. This makes record-keeping more manageable and reduces confusion come tax time.
- Consider getting help from a professional accountant or tax adviser. They can manage your filings, reduce mistakes, save you money on taxes legally, handle deadlines, and ultimately reduce stress.
- Finally, using accounting software can automate your records, saving you time and effort. This will help you avoid the last-minute panic and ensure your filings are always up to date.
Final Thoughts
If you have missed the self-assessment deadline, the situation might cause stress, but it is still manageable. The solution is straightforward: act quickly and file your return as soon as possible. Once you’ve done that, focus on sorting out your payments and addressing any penalties. Taking action early will help reduce your penalties and avoid long-term financial consequences. The sooner you handle the situation, the better off you’ll be in the long run.
If you need help with your tax return, managing penalties, or setting up a payment plan, Swiftacc is here to assist you. Contact us today for a free consultation and get back on track with your self-assessment.
