HMRC is warning self assessment taxpayers to pay what they owe or risk extra charges. New figures suggest around one million landlords, sole traders and self-employed people missed the 31 January payment deadline for their 2024 to 2025 tax bill.
If you still have not paid, today, Monday, 2 March, was the key date. Missed it, and you could face a 5% penalty on any tax still outstanding, plus late payment interest. Interest has already been accruing since 1 February at an annual rate of 7.75%, meaning the longer you leave it, the faster the cost rises.
That rate is notably higher than the Bank of England base rate of 3.75%, so late payment can quickly become expensive, especially for larger bills.
HMRC’s penalty rules are not new. The system has been in place since the 1990s, and while the £100 fixed fine for late filing has remained unchanged for years, late payment penalties and interest continue to be a real bite for anyone who falls behind.
Many taxpayers are feeling squeezed. Frozen tax thresholds, higher household costs and uneven income have made it harder for some to put money aside for self assessment. At the same time, the planned move to Making Tax Digital for income tax is adding another layer of worry, particularly for people who have never needed to keep digital records.
If you cannot pay in full, contact HMRC to discuss your options and avoid the situation worsening. Even a short delay adds to costs.
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