Taxpayers frustrated as HMRC toughens late self-assessment stance

HMRC has fined 14% more people year-on-year for late self-assessment tax filing, leaving well-intentioned taxpayers frustrated.

“The pool of people at risk of being fined for late payment is now bigger than ever as self-employment continues to grow,” said Tim Woodgates, associate and tax specialist at Moore Stephens. “UK taxpayers are feeling the pinch. As a result, some do not have the money to pay the tax bill on time, even though they want to.”

In 2015/16, 291,000 taxpayers were penalised for late payments, while that figure jumped to 331,000 in 2016/17 (the latest full year available). In 2017/18, HMRC has already raised 233,000 fines says Moore Stephens.

The jump in fines may be attributed to the record number of self-employed individuals, which has soared by 180,000 in just one year to make a grand total of 4.93m in March 2019.

Moore Stephens suggests that new taxpayers are unfamiliar with tax deadlines and suffer as a result while appeals are increasingly in vain.

Just 14% of all fines for late self-assessment tax payments were cancelled last year, falling from 16% and 18% respectively on the previous two years.

Late self-assessment fines in a nutshell

If the taxpayer is 30 days or more late in paying their tax returns, they are issued with a fine of 5% of all the outstanding tax.

At six months, they are issued with a further fine of 5% of all the tax due at that date, and repeated again at 12 months.

The next self-assessment tax deadline for the tax year ending 5 April 2019 is midnight on 31 January 2020.