Around 600,000 taxpayers missed the final self-assessment tax return deadline

Around 600,000 taxpayers missed the final 31 January deadline to file their 2021-22 self-assessment tax return, according to HMRC.

The tax authority says it received nearly 11.4m of the tax returns it expected by midnight on 31 January, but it was expecting more than 12m.

A lot of people left it to the last minute with 36,767 customers filing theirs in the last hour before the deadline. The peak hour for filing on 31 January was between 4pm and 4.59pm, when 68,462 customers submitted their tax return.

Taxpayers that failed to file on time face a £100 penalty for tardiness, plus interest on any unpaid tax if they haven't yet paid their tax bill. 

Here, Which? explains what happens now if you missed the deadline, and why you shouldn't delay the process any longer.

What are the penalties for late filers?

Unlike last year, when HMRC waived the £100 fine for filing late until 1 March 2022, penalties for missing the deadline are back to the usual dates, and kicked in from 1 February 2023.

Unless you have a 'reasonable excuse' and haven't already made an alternative arrangement with the tax office, fees will work like this:

• One day late (1 February 2023) £100 fine
• Up to three months late (30 April 2023) £10 each day, capped at 90 days (plus initial £100 fine)
• Six months late (31 July 2023) 5% of the tax due, or £300, whichever is higher
• 12 months late (31 January 2023) 5% of the tax due, or £300, whichever is higher.

There are separate fines for late tax payments, which are charged in addition to any fees for not filing on time.

• Find out more: late tax returns and penalties for mistakes

What is a reasonable excuse for missing the deadline?

HMRC has said it will be lenient about issuing fines to anyone who has genuinely been unable to file their tax return on time.

It says it assesses reasons behind late tax returns on a case by case basis, but would consider some of the following examples as 'reasonable excuses' for filing late:

• The recent death of a partner
• Unexpected stay in hospital
• Issues with HMRC's online services
• Having an unexpected stay in hospital.

If HMRC accepts that you had a reasonable excuse, it should waive any late filing charges.

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I'm late paying my tax bill: what happens now?

Taxpayers that fail to pay their bill for 2021-22 on time also face penalties. How much you are charged depends on how late you are.

From 1 February, you will be charged 6% daily interest on any outstanding tax - double what it was this time last year. If you still haven't settled the bill after 30 days or set up a repayment arrangement with HMRC, additional penalties kick in. 

Here's how it works: 

• From 1 February 2023 6% interest charged on outstanding tax 
• From 2 March 2023 A charge equal to 5% of the tax due 
• Six months late (31 July 2023) A further 5% charge
• 12 months late (31 January 2023) Another 5% charge.

Find out more: self-employed tax returns and what you need to know

Help if you can't pay

If you've missed the payment deadline but aren't able to pay off the balance, get in touch with HMRC as soon as possible to discuss your options. 

If you owe less than £30,000 in tax, you may be able to sign up for payment plan. This allows you to pay in smaller instalments, but you’ll still be charged interest on what you owe.

To set up a payment plan online yourself, you'll need to be within 60 days of the 31 January payment deadline and not have any other payment plans or debts with HMRC. For other circumstances, call the Payment Support Service on 0300 200 3835.

HMRC says there is no 'standard' arrangement and the time period for instalments will be decided on a case-by-case basis. 

If you don't contact HMRC, or refuse to pay your tax bill, you could face things such as debt collection agencies or being taken to court.

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What if you've made a mistake?

In November 2022, we surveyed 881 people who will be filing a self-assessment tax return themselves for the 2021-22 tax year. And 31% of those who’ve filed a tax return before said the thing they disliked most was worrying about making a mistake.

If you have filed already and think you've made an error, don't panic. You can correct a tax return within 12 months of the self-assessment deadline.

However, HMRC can impose fines for mistakes if it thinks you haven't taken 'reasonable care' in filling out the form. 

Penalties are based on the amount of tax you owe, and whether HMRC believes you have provided incorrect information on purpose. Charges for errors are calculated as below:

• 0% charge You've taken 'reasonable care' to fill out your tax return correctly
• 0-30% charge You've been careless and made mistakes
• 20-70% charge You've deliberately underestimated your tax
• 30-100% charge You've deliberately underestimated your tax and tried to conceal it.

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Try the Which? tax calculator

If you haven't filed your 2021-22 tax return yet, you can still use the Which? Tax calculator for the task.

You can calculate how much tax you owe from a range of income sources, and it will even suggest allowances and expenses you might have forgotten.

When you're ready, you can use the tool to file your tax return directly to HMRC.