The 31 January Filing Deadline – Self Assessment

As the festive season approaches and the year draws to a close, many individuals in self-assessment will soon be winding down for the holidays content that their 2024/25 tax returns are submitted. Others, however, may be tempted to push the 31 January 2026 filing deadline to the back of their minds, dealing with it in the New Year.

However, with less than 3 weeks to go until 31 January 2026, it is important that you ensure you meet your reporting obligations to HM Revenue and Customs (HMRC) on time. If not, you could face late filing penalties and interest charges on any unpaid tax liability (not a great start to the New Year).

Do I need to file a tax return?

Some individuals in self-assessment will have been doing it for many years and will be very familiar with the process, what needs to be reported, and when. For those who have never been in self-assessment before and do not know if they need to file a tax return, there is a handy tool on HMRC’s website that can let you know if you need to file a tax return.

Broadly speaking, you will need to file a 2024/25 tax return if you meet any of the following in the year to 5 April 2025:

• You were a sole trader and had turnover of more than £1,000
• You were a partner in a business partnership.
• You had income from renting out a property.
• You had untaxed income from savings or investments
• You received income from abroad
• You accessed your private pension early
• You are due to pay Capital Gains Tax on assets sold at a profit
• You were required to pay the high-income Child Benefit charge

There are many other reasons in addition to the above why a person might need to file a 2024/25 tax return, some reasons even include claiming reliefs and reclaiming overpaid tax. If you are unsure if you need to file a return, please get in contact with a member of our team.

What happens if I file or pay late?

The 31 January 2026 is a hard deadline and cannot be extended. With the paper filing deadline having already passed back in October, all 2024/25 tax returns must be filed online by 31 January 2026, or the individual will be levied with an immediate £100 late filing penalty.  The only exception to this is where HMRC have issued a notice to file a tax return late, in which case the filing deadline will be 3 months from the date of issue.

Whilst these penalties can, in theory, be appealed, the conditions for appealing are very strict, and HMRC is very unlikely to cancel late filing penalties except under exceptional circumstances.

Further penalties will become payable once the filing deadline has passed:

• Over three months late, penalties of £10 per day, up to a maximum of 90 days, therefore £900 will apply.
• Over six months late, the penalty will be the higher of £300 or 5% of the total tax due.
• Over twelve months late, and the penalty will be a further £300 or 5% of the tax due, again whichever is higher.

HMRC will also automatically apply interest to all outstanding tax payments. The interest rate on outstanding income tax and capital gains tax is currently 8.00% per annum, which can result in substantial charges for those with significant tax liabilities.

The interest charges for late payments are also significantly higher than the overpayment interest rate of 3.00% that HMRC will repay to taxpayers who have overpaid their tax for the year.

Similar to the late filing penalties, late payment penalties also arise on top of the interest once 30 days have passed from the due date:

• Thirty days late, the penalty will be 5% of the tax that you owe on that date.
• Six months late, a further 5% of the tax owed.
• Twelve months late, a further 5% of the tax owed at that date

If a taxpayer is struggling to make tax payments by the due dates, they can contact HMRC to see if a Time to Pay arrangement is available. If this is arranged, then no late payment penalties will arise, though importantly, the late payment interest charges will always be levied.

You can set up a Time to Pay arrangement online with HMRC if all of the following conditions are met:

• You are up to date on your Self-Assessment Tax Return filing and have filed your latest Tax Return.
• You have a Tax Liability of £30,000 or less.
• You are within 60 days of the payment deadline.
• You do not have any other outstanding payment plans or debts to settle with HMRC

Where the liability is more than £30,000, you may still be able to set a Time to Pay arrangement, but you will have to speak to HMRC directly regarding this. To set up a payment plan with HMRC, they will ask you questions about your income and your spending patterns.

How can we help?

Understanding and staying on top of your tax obligations can help you avoid unnecessary costs. If you need any support, advice or guidance with completing your tax return, or if you have any questions about the 31 January filing deadline, please do not hesitate to get in contact with Adrian Gill, Euan Gardiner, or your usual AAB contact.