Millions of individuals in the UK are facing a looming tax deadline with a significant portion yet to submit their self-assessment returns. The Her Majesty's Revenue and Customs (HMRC) has issued a warning, emphasizing the financial penalties for those who fail to comply by the deadline.
The HMRC estimates that approximately 5.4 million individuals still need to complete their online tax assessments. This includes a substantial number of UK-based entrepreneurs who utilize online marketplaces like Vinted, eBay, and Etsy. Recent legislation mandates that these platforms collect specific seller data and share it with the HMRC, targeting those who sell 30 or more items annually or have earnings exceeding £1,700.
While many online sellers may not be affected by the requirement, earnings exceeding £1,000 will be subject to the self-assessment process. Additional individuals who may need to file include the self-employed earning over £1,000, those wanting to voluntarily pay Class 2 National Insurance contributions, new business partners, those with untaxed income over £2,500, or those receiving Child Benefit and exceeding the threshold for the High Income Child Benefit Charge.
The HMRC has provided a readily accessible tool to help individuals determine their self-assessment filing obligation. To avoid penalties and interest charges, the quickest approach is completing the tax return via the HMRC's online services found on GOV.UK.
Late filing penalties can be substantial. The HMRC outlines a tiered penalty system, starting with an initial fixed penalty of £100, regardless of tax owed. Further penalties of £10 per day may apply after three months, capped at £900. After six months, a further 5% of tax due, or £300, whichever is greater, can be levied. Finally, after a full year, a penalty of another 5% or £300, whichever is higher, is applied.
