Two-week warning issued over £100 HMRC fines | Personal Finance | Finance
Millions of households are being warned they have just two weeks left to avoid a minimum £100 HMRC fine. The tax office asks many people to file a self-assessment tax return at the end of January, and contrary to popular belief, it’s not just for the self-employed.
People who earned more than £1,000 from side hustles, those who claimed Child Benefit and earned more than £60,000, and those who sold a second property or who received rental income are just a few groups who are liable to file a self-assessment tax return and pay extra tax to HMRC.
Mike Ambery, Retirement Savings Director at Standard Life, issued a warning to households to act now to avoid a £100 fine.
He said: “The deadline for filing online self-assessment tax returns is just two weeks away, and many self-employed and higher earners will be feeling under pressure to act. While tax returns certainly aren’t known for being fun, not doing them on time can be surprisingly costly, with HMRC charging a £100 fine for those who miss the initial deadline.
“That’s why it’s vital that people don’t leave it too late, and make sure they understand what’s required of them and have everything they need now.
“With the recent Autumn Budget offering no relief on frozen tax thresholds or key ‘cliff edges’ like the £60,000 trigger for the High Income Child Benefit Charge (HICBC), more people may now be required to complete a self-assessment tax return for the first time as their wages rise.
“This is particularly relevant for families claiming Child Benefit, where even a small increase in income can leave individuals and households subject to the HICBC and create the obligation to submit a return.”
It’s not all bad news though – Mike stressed that the self-assessment is also the opportunity to claim some tax relief that you may be owed, which will put more money back into your pocket too.
He added: “It’s also worth remembering that for higher earners, completing a self-assessment isn’t just about meeting tax obligations – it can be an opportunity to check you’re claiming all the pension tax relief you’re entitled to.
“Taking the time to review your position now can help avoid nasty tax surprises and ensure you’re not missing out on valuable long-term savings.
“For future tax years, contributing more to your pension could also reduce your adjusted net income, potentially lowering or even eliminating the HICBC, while boosting your long-term retirement savings.
“Salary sacrifice arrangements can be especially effective here, as they allow you to exchange part of your salary for pension contributions, reducing taxable income. Although the rules around salary sacrifice are set to change in 2029, it remains a valuable tool.”
