We can sympathise, you may have not realised that you need to complete a Self Assessment tax return or you didn’t know that HMRC has a registration deadline set for October 5th. Missing a Self Assessment registration deadline can feel overwhelming. However, there are steps you can take to rectify the situation and avoid severe penalties. 

Check if you need to register for a tax return

The below are some common reasons why you would need to register for Self Assessment but they are not exhaustive. If you’re unsure whether you need to submit a tax return, always seek advice from an accountant who will be able to assist. 

• You are self-employed.
• You’ve earned more than £1,000 from a side hustle or freelance work.
• You received untaxed income, such as rental income or interest.
• You made significant capital gains from assets like shares or crypto.
• Your total income exceeds £100,000.
• You receive Child Benefit and receive taxable income of £50,000 or above (this has risen to £60,000 in the 2024-25 tax year). 

What happens when you don’t register for Self Assessment in time?

Can HMRC immediately start charging you penalties?

If you became self-employed, made sizeable gains on shares or cryptoassets, became an LLP member or earned a six-figure salary between 6 April 2023 and 5 April 2024, then you may well have needed to register for Self Assessment. The problem is that HMRC’s guidance on deadlines says you need to have registered for Self Assessment for the 2023-24 tax year by 5 October 2024 – around three and a half months ago.

So, if you’ve missed this deadline, how do you go about fixing it? Well, you should still register as soon as you can because you still need to submit a tax return eventually. HMRC grants all new Self Assessment sign-ups a three-month submission window from the date of registration (extending beyond the default 31 January deadline) so you won’t get stung with penalties right off the bat, but the clock does start ticking and you will still be due to pay interest on any payments made after the end of January.

Once registered, you’ll be sent your Unique Taxpayer Reference. This is similar to a National Insurance Number because it’s specific to you, but is only used for Self Assessment purposes. With this, you or your accountant can now draft up your tax return and figure out how much tax you’re due to pay. Suppose your tax bill is higher than anticipated, and you’re unsure whether you’ll be able to pay your tax bill in one go. In that case, HMRC may allow you to pay in instalments if you are registered and submit your tax return before 1 April – another great reason to get registered sooner rather than later.

And if you’re not certain whether you need to register, HMRC’s guidelines for Self Assessment registration can be found here, so don’t get caught out.

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Steps to Take If You Missed the Deadline

1. Register for Self Assessment immediately: You should register with HMRC as soon as possible. Registration is done via the HMRC website and involves providing details such as your National Insurance number, business information (if applicable), and income sources.
2. Understand the submission window Upon registration, HMRC grants new registrants a three-month window to file their tax return, even if this extends beyond the usual 31 January filing deadline. For example, if you register on 15 February 2025, your new deadline for submitting your tax return will be 15 May 2025. The extension deadline is typically 3 months from the date of issue of the return but the date will be shown on the Tax Return / notice that you are sent from HMRC. 
3. Receive your unique taxpayer reference (UTR) Once registered, HMRC will send you your UTR. This 10-digit number is essential for completing your tax return. 
4. Submit your tax return Use your UTR to log into your HMRC account and submit your tax return. You can do this yourself or we can help.
5. Arrange payment If you owe tax, it’s best to pay it as soon as possible to minimise interest charges. For larger tax bills, HMRC’s Time to Pay service allows eligible taxpayers to arrange payment plans. To qualify, you must file your tax return and contact HMRC before 1 April 2025. To set up a payment plan, you must have submitted your return, owe £30,000 or less and be within 60 days of the payment deadline. You also cannot have any other debts or payment plans with HMRC. It is best to phone HMRC as soon as possible to discuss. 

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When do you start paying penalties?

HMRC has certain penalties in place if you pay your taxes late which can scale quickly if you do not resolve them in a timely manner.

The first penalty they can charge you is for late registration, but this is assessed on a case-by-case basis. If you can demonstrate a reasonable excuse for missing the deadline, such as illness or unforeseen circumstances, you may avoid penalties.

Late filing penalties are applied when you send your tax return late and apply even if you do not have a tax liability. 

• The initial penalty for failing to file a tax return on time remains £100.
• Additional penalties apply after three, six, and twelve months, based on a percentage of the unpaid tax.
  
  - £10 per day is charged per day for a maximum of 90 days when the tax return is 3 months late.
  - the higher of £300 or 5% of the tax due is applied if the tax return is 6 months late
  - a further £300 or 5% of the tax due is applied if the tax return is 12 months late
  
  To estimate your penalty for late submission, you can use this tool on the government's website.

You’re also subject to late payment penalties. HMRC will charge interest on late payments as a way of compensation for the delay. The current interest rate for late payments (updated 20 Nov 2024) is 7.25%. 

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• After 30 days a payment is late, HMRC will charge 5% of the tax outstanding as a penalty
• After an additional 5 months (6 months late), a further 5% of tax outstanding
• After an additional 6 months (12 months late), a further 5% of tax outstanding

The penalties can scale quite exponentially. However, you will not be charged additional penalties if you have entered into a Time To Pay arrangement with HMRC.

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Get in touch

Managing tax issues can feel overwhelming, but a reliable and experienced accountant can make the process much smoother. They can help reduce or mitigate potential penalties, explain your available options, and even appeal decisions if there are valid grounds to do so. You don’t have to face this alone, if you need help get in touch with us today.