HomeDebt Advice HubarticlesDon’t Let Self-Assessment Tax Debt Spiral: Understanding Your Options Before January 31st
Don’t Let Self-Assessment Tax Debt Spiral: Understanding Your Options Before January 31st
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As of January 23rd, 2025, HMRC reported that 3.4 million Self Assessment returns were still outstanding before the January 31st deadline. This mirrors last year’s concerning pattern, where an estimated 1.1 million individuals missed the deadline, each incurring a penalty of at least £100.
Business owners across all sectors – from retail and professional services to technology and trades – are racing against time, with our team seeing particular concerns from those in sectors such as transport & haulage, construction and hospitality. Many are worried that they’ll struggle to pay, and time is running out.
The True Cost of Late Filing and Payment
Missing the deadline isn’t just about the initial £100 penalty. Here’s exactly how the penalties escalate:
Late Filing Penalties
Day One: Automatic £100 penalty (as faced by 1.1 million people last year)
3 Months Late: Additional £10 daily penalties for 90 days (up to £900)
6 Months Late: £300 or 5% of tax due (whichever is greater)
12 Months Late: Another £300 or 5% of tax due
In the case of a deliberate non-filing there is the potential penalty of 100% tax being owed.
Late Payment Penalties
30 Days Late: 5% of unpaid tax
6 Months Late: Additional 5% charge
12 Months Late: Further 5% charge
Plus, daily interest currently at 7.75% per annum
Real Life Impact
Consider this scenario: A director who owes £5,600 in tax and delays both filing and payment for a year could face:
Initial Penalties: £1,600 in late filing charges
Payment Penalties: £840 (three 5% charges)
Interest: Approximately £385
Total Payable: £8,425 (compared to original £5,600)
That’s an additional £2,825 in avoidable charges.
Why Business Owners Are Struggling
We’re seeing unprecedented numbers of businesses across all sectors facing:
Most importantly, we provide something many of our clients tell us they valued the most, a reality check about their situation. Our debt strategists won’t sugar-coat the challenges you face, but theywill help you understand your options and develop a practical path forward.
Don’t Become Another Statistic
With 3.4 million returns still outstanding and last year’s 1.1 million missed deadlines, the numbers tell a clear story – but the consequences go far beyond just penalties and interest.
HMRC have significant recovery powers at their disposal, including:
Initiating bankruptcy proceedings against individuals
Forcing the sale of personal assets, including family homes
Affecting your credit rating for years to come
Restricting your ability to run a business in the future
You can read more about the full implications of bankruptcy on our website. The impact on your personal and professional life can be devastating and long-lasting.
Take Action Today
Contact our team of specialists today for your free case review.
Remember: Acting promptly before the deadline gives you more options and could save you thousands of pounds in penalties. Our team has helped hundreds of business owners across the UK to find long-lasting commercial solutions for tax debt – let us help you too.
Read Other Client Testimonials, or visit our Trust Pilot
A totally trustworthy company
I approached Bell & Company in early 2022 with a personal guarantee that had resulted in a charge on my house. This left very little leeway for negotiation. My case administrator Luke was calm and extremely professional. Working methodically whilst…
A totally trustworthy company
I approached Bell & Company in early 2022 with a personal guarantee that had resulted in a charge on my house. This left very little leeway for negotiation.
My case administrator Luke was calm and extremely professional. Working methodically whilst always reminding me that there was no certainty he kept in regular contact by phone and email. In Autumn 2022 Bell & Company finally managed to settle with the bank for £10k plus fees on a charge of over £50k.
However the story didn’t end there. Big bank admin meant that it took another 12 months to amend the Land Registry. Even though their obligation towards me had ended, Bell & Company through Luke continued to chase the bank repeatedly until the matter was completely settled.
Luke’s diligence and hard work have made a huge difference to my life. The worry and stress of these problems are well known. I thank Luke and Bell & Company and I recommend them most highly. It is obvious that the wealth of knowledge and expertise within Bell & Company can influence even the most powerful financial organisations.
L Casey – GB
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