The countdown has started for the 5.7m taxpayers who still need to file their tax returns before the 31 January self assessment deadline.
HMRC has revealed today that out of the 12m taxpayers who have to file a tax return, just under half still need to do so before the end of the month.
The start of a new year should come as a wake-up call for taxpayers to meet the deadline as unlike the past couple of years, HMRC is not likely to waive late-filing penalties and the late payment interest rate is set to rise too.
New Year Resolutions
The call for taxpayers to submit their tax returns before the deadline comes as 42,500 clearly had this as their New Year’s resolution and filed theirs on 31 December and 1 January.
Statistics from the tax department show that 25,043 returns were filed on New Year’s Eve, with 129 taxpayers opting against seeing in the New Year by singing Auld Lang Syne and banging pots and pans and instead submitted their tax returns between midnight and 12.59am.
A further 17,571 ticked their tax return off their 2023 to-do list and filed it on New Year’s Day. The Christmas period between 24 December and 26 December also saw 22,060 taxpayers use the downtime to submit their forms online, with HMRC reporting that 3,275 were filed on Christmas Day.
Mirroring Previous Years
The number of tax returns still to be filed mirrors the exact number this time last year. In 2021 HMRC had received 6.6m tax returns and was waiting on 5.4m to come in.
However, taxpayers and accountants had a reprieve from the usual 31 January deadline stresses after HMRC waived late filing penalties until 28 February for the second year running, due to the Covid pandemic squeezing capacity levels for accountancy firms.
However, the number of people filing tax returns over the Christmas period was down on last year where 33,467 filed on New Year’s Eve and 31,271 were filed from Christmas Eve to Boxing Day.
While accountants and taxpayers have moved on from the Covid workloads, they are instead facing other challenges brought on by the cost-of-living squeeze and growing pressures from the economic downturn.
HMRC Gets Tough On Tax Debt
However, BDO’s Dawn Register has warned taxpayers to not expect the same goodwill from HMRC this year as the tax authority is getting tougher on recovering tax debt.
“During the pandemic, HMRC did show some forbearance. Taxpayers were allowed to defer Self Assessment and VAT payments, there was a moratorium on creditor-led insolvency action and HMRC temporarily suspended proactive debt collection activity.
“The result was that tax debt ballooned. While the Revenue has worked hard to reduce this, the latest figures show total tax debt currently stands at £46.9bn. That’s more than double the pre-pandemic level at the end of March 2020 when tax debt was £19bn. As a result of this huge increase, HMRC’s debt management teams will be under considerable pressure to bring in the cash.”
Register warned that HMRC is unlikely to waive late penalties this year and those that pay late will be hit with a higher interest charge, which is set to increase to 6% from 6 January 2023.