Are you prepared for the upcoming self-assessment filing deadline?
As the new year begins, the 31 January self-assessment tax filing deadline is fast approaching. Failure to report on time can result in penalties and interest being charged on any unpaid tax.
Who needs to file a tax return?
A tax return must be filed if any of the following applied in the 2024/25 tax year:
- You were a sole trader with a turnover of over £1,000
- You were in a business partnership as a partner
- You had to pay Capital Gains Tax (CGT) on an asset sold for profit
- You had to pay the High Income Child Benefit Charge
It may also be required if you have any of the following untaxed income:
- Rental income from a property
- Commission or tips
- Income from investments, savings or dividends
- Income from abroad
There are additional reasons why an individual may need to file. If you haven’t filed a self-assessment tax return previously or are unsure whether you need to file it, HMRC has created an online tool to help determine whether you need to file.
What are the penalties for filing late?
The 31 January 2026 deadline applies to online tax returns (the deadline for paper filing was in October). If the filing deadline is missed, a fine of £100 will be charged immediately, unless HMRC has issued a notice for the individual to be able to file the return late.
While the fine can be appealed, HMRC are not likely to cancel unless there are exceptional circumstances.
Additional penalties apply as follows:
- After three months: £10 per day to a maximum of £900.
- After six months: the higher amount of either £300 or 5% of the tax due.
- After twelve months: an additional £300 or 5% of the tax due, depending on which is the higher amount.
Interest will also be automatically added to any outstanding tax due. Currently, the interest rate on overdue income tax and CGT is 8% per annum.
What are the penalties for late payment?
The payment deadline for self-assessment tax is also 31 January 2026. If tax remains unpaid after 30 days, penalties apply in addition to interest:
- Thirty days late, the penalty is 5% of any tax owed on that date
- Six months late, an additional 5% of the tax owed on that date
- Twelve months late, another additional 5% of the tax owed on that date
Can you arrange a payment plan with HMRC?
A Time to Pay arrangement may be able to be set up if an individual is unable to make payments by the due date. If this is agreed, there will be no late payment penalties, however, the interest charges for late payment will still be applied.
This arrangement can be requested with HMRC online, provided the individual has:
- Filed their latest tax return and are up to date with their self-assessment filing.
- A tax bill of £30,000 or less.
- Not exceeded 60 days since the payment deadline.
- No other payment plans for outstanding debts with HMRC.
In some cases, it could be possible to set up a Time to Pay arrangement if the tax liability is more than £30,000.
We’re here to help
If you have any questions about the 31 January 2026 filing deadline or need advice on your self-assessment tax return, please get in touch with a tax specialist or speak to your usual Azets adviser.
