Data from HMRC revealed that although nearly 11.5 million returns were submitted on time, those who failed to file now face an automatic £100 penalty. This year’s figures represent a slight improvement on the previous year, when 1.1 million people were late, and data suggests fewer taxpayers waited until the final 24 hours to submit their details.

In an effort to manage the seasonal surge, HMRC took the unusual step of opening its phone lines on the Saturday of the deadline following previous criticism regarding service accessibility.

Charlene Young, senior pensions and savings expert at AJ Bell, said: “More than 12 million were expected to file for the 2024/25 tax year, broadly in line with last year, but fewer people left it until the final day this year. Figures show 475,722 filed on 31 January (down from over 732,000 last year), with 27,456 in the final hour before the 23.59pm deadline.

“In previous years, taxpayers had to file if they earned over a £100,000, and later £150,000, a year. Although that rule has now fallen away where a person’s only income source is taxed under PAYE, it’s likely many people believed they didn’t need to file if their circumstances changed or they have no tax to pay. This is only true if HMRC already confirmed to you directly that you don’t need to file. 

“Taxpayers with gains to report had an added challenge this year. The main rates of capital gains tax (CGT) increased to 18% for basic rate taxpayers and 24% for those paying higher rates on 30 October 2024.

“But the mid-year change meant some people risked underreporting and underpaying any tax they owe for 2024/25, or having to navigate an extra online calculator if they rely on HMRC’s systems – perhaps because they file without the help of commercial software or an accountant.”

Explaining the penalty fees collected by HMRC, Ms Young said: “An estimated 1 million people failing to file could net HMRC £100m in automatic fees alone. There is an automatic £100 fine for late filing, with extra daily penalties of £10 after 3 months (up to a maximum of £900), and additional penalties kicking in after 6 and 12 months.

These late charges apply even if there is zero tax to pay, meaning those who didn’t realise they needed to file or failed to tell the taxman why they no longer needed to for 2024/25 would have been caught. Some 600,000 people with zero tax to pay have been fined in the five years to 2025, according to analysis by Tax Policy Associates.

“Along with the late penalty, daily interest will start to accrue based on an annual rate of 7.75% on any tax owed. This is 50 basis points higher than last year. Anything for 2024-25 still left unpaid by 1 March could suffer an extra 5% penalty charge. These percentage charges apply to unpaid tax due last year, not payments on account that have been calculated for the coming year, based on last year’s bill.”