HMRC is expecting more than 12 million returns for the 2021/22 tax year by the Tuesday 31 January 2023 deadline.

To date – and with less than a month to go – it revealed 5.7 million self-assessment customers are still sitting on their tax returns.

If you fail to file by the deadline (and pay any tax owed), you may be hit with an initial £100 fixed penalty for late filing, even if no tax is owed.

Further penalties also apply, but HMRC said it will treat those with “genuine excuses leniently”, as it focuses on those who persistently fail to complete their tax returns, as well as deliberate tax evaders.

It added that for customers who provide a reasonable excuse before the 31 January deadline, they can avoid a penalty after this date.

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However, the usual penalties for late tax returns are as follows:

• 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 per 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

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, six months and 12 months.

New Year filers

HMRC revealed 25,043 tax returns were filed on New Year’s Eve, with the peak hour between 2pm and 3pm.

For 129 customers, they submitted theirs in the first 59 minutes of the New Year, while 17,571 were filed in total on 1 January 2023. The peak time for filing was between 3pm and 4pm, when 1,697 returns were received.

Myrtle Lloyd, HMRC’s director general for customer services, said: “There is less than one month for customers to submit their tax returns and my message to those yet to start is: don’t delay, do it online. HMRC provides lots of useful information to help you get started. Visit GOV.UK and search ‘Self Assessment’.”

Struggling to pay your tax bill?

If you think you’ll struggle to afford your tax bill in full, you may be able to set up a payment plan online, known as Time to Pay.

There are certain conditions to meet, such as filing your return by the deadline and owing less than £30,000, but it allows you to spread the cost over 12 months.

Latest HMRC statistics revealed 21,600 signed up to the payment plan in the first six months of the tax year, but this figure is likely to swell as the deadline approaches.

It’s important to note that interest is applied to the amount, and this is linked to the Bank of England base rate which has been rising. From 6 January 2023, the late payment interest will be set at 6%.