HMRC issues £100 tax fines with specific group of workers most at risk

Self-employed workers on lower incomes are significantly more likely to miss the self-assessment deadline and incur automatic £100 fines, new figures from HM Revenue and Customs (HMRC) show.

Data released on Tuesday highlights a clear divide between income groups when it comes to meeting the January 31 filing cutoff.

The statistics, obtained by PensionBee through a freedom of information request, indicate those earning the least face the highest risk of penalties.

During the 2023 to 2024 tax year, around 5.9 per cent of self-employed individuals earning below the basic rate threshold filed their returns late.

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This compares with 3.1 per cent of basic rate taxpayers, 2.7 per cent of higher rate taxpayers and 2.6 per cent of additional rate taxpayers.

The difference between the lowest and highest earners is more than double.

In total, approximately 180,000 self-employed individuals submitted their tax returns after the deadline.

Of those, around 94 per cent were either below the basic rate or within the basic rate band.

Those who miss the deadline typically face an immediate £100 penalty, with further charges applied for continued delays.

HMRC may waive fines where taxpayers can demonstrate a reasonable excuse for late submission.

PensionBee said the findings point to a gap in financial knowledge among lower earners, alongside broader challenges affecting what it described as the "invisible workforce".

The company said workers on modest incomes are less likely to have access to accountants or financial advisers.

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Previous research by PensionBee found many self-employed individuals are unaware their pension contributions qualify for tax relief.

Lisa Picardo, chief business officer UK at PensionBee, said: "Late filing of self-assessment tax returns is not evenly spread across the self-employed population."

Ms Picardo said: "It's heavily concentrated among those on lower incomes, many of whom sit within what we describe as the 'invisible workforce'.

"For many of these workers, unpredictable income and limited support make it genuinely harder to stay on top of financial administration and obligations, whether that is filing a tax return or saving into a personal pension."

Ms Picardo said: "Missing the deadline is often a symptom of a wider pressure that the system does not adequately account for."

An HMRC spokesman said: "We're focused on helping customers understand what they need to do and where to get support.

"Every year we run a national campaign to support self-assessment customers to file on time, while providing clear guidance on gov.uk and extra help from our expert advisers for those who need it."

HMRC said 11.5 million customers successfully submitted their 2024 to 2025 tax returns before the deadline.

The department said support remains available for those needing assistance, with penalties potentially cancelled where valid reasons for delay are provided.

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